Monday, November 3, 2014

Blog 7: Deals, for You or for Them?

Its Christmas time and you want to hit the mall for the best products and deals to get all the gifts you need to put under the tree. You walk through stores such as Macy's, Famous Footwear, American Eagle and Bath & Body Works to get everyone in your family what they wanted on their wishlist. The deals are to the ceiling, Two for One! Buy one get one 50% off! 30% off when you buy Two or more! Buy Two get One FREE! There is not one thing about those discount signs that isn't attracting to the consumer eye. Why do you think Black Friday has basically become its own holiday in the United States? Consumers love deals. Consumers love getting good products at a good price. So how do companies create these deals while also being able to benefit from them themselves? Of course, its all one big plan.


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It all starts with pricing. Pricing is the money or considerations (including other products and services) exchanged for the ownership or use of a product or service. Pricing is a very important component in the process of a company putting a product out on the market. It impacts all the financials of the company as well as the overall profit it will have. With this in consideration, why would a company want to have sales? Well sales draw in the consumer. To see that they can get the products they want at a deal rather than paying the regular set price is something that could win them over. There are a few ways that sales still draw the consumer in, but remain mainly benefiting the company's sales. These include:
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Flash Sales - These are sales on items that cut the price for only a few hours, leaving consumers to make a decision on the spot and not enough allotted time to calculate the math.
Shortcuts - By having these sales, especially those say on Black Friday where those sales are a one time deal, many consumers feel they can do shortcut math to see if the deals are worth it. Sometimes that works but for the most part those calculations are a bit more complicated than that and are planned out by the company who put them up. 
Discounts on Discounts - They are far less fair than they appear. Discounts on top of one another may look like a huge save but sometimes might not exactly equal to add up as much as the consumer thinks. This is because each following discount is taken off at a lower price base.
What They Don't Necessarily Need - Offering "good deals" on items that a consumer might want, but might not necessarily need would feed into their want to buy the product. By having these deals it opens up what the consumer thinks is an opportunity for a bargain on something they want, but don't really need over other things. 

In stores such as Macy's and Famous Footwear, multiple brands are showcased within the store and certain sales tactics can draw in those consumers who have loyalty to those brands in the store. This goes for stores like American Eagle also who have a popular target market and cater their sales to the needs of that target market that is loyal to their brands. All of this is interesting to look at because at the end of the day, no matter what the price, it is all strategically planned to go back to what will be profitable for the company. 

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