On November 6, 2009
Which Do Customers Really Prefer: Cut Prices or More Brands?
Price cuts are a good way to build sales and destroy the business. London’s Evening Standard newspaper has been giving a masterclass in this suicidal art form. Over the last two years it has responded to the free sheets by halving its price, giving it away free on some days, charging full price but giving away free umbrellas, charging less after 9pm at some locations; offering discounts for loyalty card holders and many other pricing wheezes. Each short-term fix gave a short-term boost to sales. It was following the ‘birdie strategy’ — birds go “cheep cheep”, and the Standard went cheap, cheap. Academics call this “blue ocean strategy”, which sounds fancier. But each short-term fix was as effective as another…
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