As we wrote a short time ago, companies are not always transparent or honest when they say an item is ‘on sale’ when it really is not: “Unfortunately, many retailers misuse the term ‘sale.’ And shoppers are often persuaded that a product is on sale even when it isn’t.” According to Evans and Berman’s Marketing in the 21st Century: Price advertising guidelines have been set by the FTC and trade associations such as the Better Business Bureau. The FTC’s guidelines set standards of permissible conduct in these categories.”
STILL not convinced that all ‘sales’ really are sales?
Then, consider these observations from David Streitfeld, writing for the NY Times:
“The perception of a bargain is fostered by online retailers’ use of something variously labeled list price, suggested price, reference price, or manufacturer’s suggested retail price. Whatever its name, the implication is that people are paying much more somewhere else. But with many products online, you could not pay the list price even if you wanted to. That is because hardly anyone is actually charging it. It is a sales tactic that is drawing legal scrutiny, as well as prompting questions about the integrity of E-commerce. If everyone is getting a deal, is anyone really getting a deal?”
“Here is one recent example of how retailers use list prices to motivate online buyers: Le Creuset’s iron-handle skillet, 11 ¾ inches wide and cherry in color. Amazon said that it would knock $60 off the $260 list price to sell the skillet for $200. Sounds like a bargain, the sort of deal that has helped propel Amazon to over $100 billion in annual revenue. Check around, though. The suggested price for the skillet at Williams-Sonoma.com is $285, but customers can buy it for $200. At AllModern.com, the list price is $250 but its sale price is $200. AtCutleryandMore.com, the list price is $285 and the sale price is $200. An additional 15 or so online retailers charge $200. On Le Creuset’s own site, it sells the pan for $200.”
Click the image to read more from the NYT.
Sale could be a strong stimuli in consumer behavior, however, most of the sale is not real. For instance, in many big shopping festival such as Black Fridays in US or Single Days in China, many online retailers lift up the original prices and then discounted as a big sale. It’s hard for consumers to recognize the real discount from the fake sales.
It is a successful tactic to promote the sales. Companies grasp the consumer psychology and smartly utilize it. However, customers may feel uncomfortable when they realized these marketing methods. Recently, I read a report related to the “suggested price” and “our price” in the Outlets. Outlets use this price to confuse customers. It makes customers feel that they get a big discount, but actually it is a marketing trick. Also, some of luxury goods in the Outlets are manufactured from a product line other than the regular one. These products are different to the one in exclusive shop. Although companies can gain more revenue, it might influences customers’ satisfaction when they realized the sales tactic.
Consumer behavior determines the strategy that a company made in order to increase their sales. As everyone wants products that are cheap but at the same time, the products have to be in the same quality, so company figured out a pricing strategy that when a product was priced higher than the market value, while they are on “sale”, the product just goes back to its market value, but the consumer thinks that the product actually became cheaper. It is similar to the things that you see daily, $9.99 is actually the same as $10.00, but people just feel that its cheaper this way and possibly buy it on the $9.99 rather than the $10.
I always encounter this situation when I purchase something online, thus I will compare the price of same products in different website instead of buy it immediately. Typically, I would observe the price for a while when I want to buy some expensive products. This method would not fool me.
Discounting is remarkably successful piece of commercial gamesmanship .Companies profit by grasping the consumer psychology which is buying more on sale goods than original price of goods.However,for consumer,it is invade their the right to know and not equity.
It was interesting to read the following article and the discussion of the word sale. As an online shopper, it was intriguing that “price advertising guidelines have been set by the FTC and trade associations such as the Better Business Bureau.” The tactic sale is a marketing trick that has been used widely, although at the end of the day the tactic depends on consumer behavior.
That is true, retails always use some ” sale” words appeal to customers, but sometimes they don’t really give a proper discount to customers. And the most angry situation is that these retailers cheat people. For example, the price for a pair of shoes in a website is $80 originally, and now it provide a 15% discount, but when you check the original price again, noticing that it changed from $80 to $100, so now the final price is $85 that is even higher than the first price. And to be honest, many people even aren’t aware of this terrible fact.