Only one way to find out for sure Burgh, don't you think its worth the effort to do so to satisfy your hypothesis. Just an FYI, I was an executive at Target Corp. from 2000-2005. Regional Team Leader Operations for Region 300, stretching from North Carolina to Florida and over to Lousiana. Target is a great place to work, committed to their team members work/life balance, at least when I was there.
Let us know, we would all appreciate the information kindly!
Just an FYI...I've sold to national retailers or consulted to companies who sell to them for 6 times longer than that.
Do you really believe that Target pays for the production of that 34 page color circular, pays the printing costs, pays to distribute it to tens of millions of homes, and funds all of the price-off discounts for all the products in their weekly ads with no financial assistance from the manufacturers of the products that are being advertised? It sounds like you're implying that manufacturers pay nothing for the priviledge of having their product advertised and displayed at a reduced price in thousands of stores...no marketing funds, no advertising fees, or no feature ad discounted pricing. Companies sell their products to Target at full-price and Target does the rest...for free. Is that really what you're saying?
You still never answered my basic question...Would SODA sell more product at $79.99 or at $99.99 with a $20 gift card? That was the my original post...I didn't understand their pricing strategy and I thought what they were doing is a mistake.
I was not involved on the stock last black Friday. Were they offering this type of black Friday deal? I would think they'd sell a ton of syrups at buy 2 get one as well. Are they more aggressive?
Sentiment: Strong Buy
Let me add my 2 cents...gift card deals like this are viewed the same by consumers as buying the item for $79 vs $99 - $20 gift card. The approach benefits the retailer by (1) assuring the consumer spends $20 additional at that store and probably more (& all at regular profit margins), or (2) the consumer forgets they have the card, loses it, etc and never spends the discounts. Trust these retailers study these marketing approaches ad nausium before implemnetaiton and have data to back up they are effective.
I don't understand SODA's pricing strategy.
Genesis is $99.99 in Target ad but you get a $20 Target gift card with purchase. I just got a BBBY circular and Genesis is also priced at $99.99 with a $10 rebate offer. In other words, it's priced at regular price in both ads with some form of delayed savings.
Why are they complicating it for consumers with gift cards and rebate forms? SODA is paying for that gift card and that rebate so why not just price the product at $89 or $79. I'm certain they would sell more machines with a lower price point.
People are sleeping on sidewalks for a week, standing in line in the middle of the night, and killing each other on Black Friday all to save a couple of bucks. Conusmers are looking for bargains...not gift cards and rebates.
I think you are wrong. People like free things more than discounts. I sell real estate and sometimes make tens of thousands at a closing. Yet, I feel almost hurt if I leave the closing table without a free 50 cent pen or pad of paper from the closing company. Free is good.
Well you are the merchandising guy right? You tell us. IMO EVERY woman wants a "deal". She can buy her soda maker now and get a deal on syrups, or toilet paper, or whatever crap she wants later, increase future traffic.