During economic downturns markets typically get smaller and conditions more competitive. Many businesses cut their prices to win business to survive. If all businesses in a market do this you have a 'price war'. Whilst this may work to some extent in the short term, it is rarely a long term solution - as prices fall, margins contract and profits diminish - placing your very survival at risk.
If you are having to reduce prices (discounting) to win business, chances are that your customer cannot differentiate the value in your product compared to that of your competitor's. If both products appear to be the same the only thing left to differ on may be the price - and the process of price cutting begins.
Rather than discounting, maybe you could consider differentiating your product possibly by adding value or introducing some unique feature.
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