Pricing Methods - Shopping Deals

Since I love to shop, I found the pricing methods section of marketing very interesting. It turns out that some of my favorite shopping deals are due to companies' pricing strategies.  Some of my favorite deals are size discounts, price bundling, uniform delivered pricing, and loss leader pricing (aka BOGO!).

I recently watched the video "Costco Craze" and it gave great insight into the pricing strategy of size discounts.  A size discount is when a larger quantity of an item is sold at a lower cost per ounce.  This method is used to encourage consumers to purchase larger quantities each time they buy.  Costco has definitely mastered this technique.  They sell everything in bulk, so consumers are forced to buy more, while saving more.  I am a huge fan of Costco. They have great quality items and if you can eat all the food before it goes bad, it can really save you money!

Another of my favorite shopping deals is price bundling.  Price bundling is when a store sells more than one product for a single, lower price.  For example, I bought a new Serta mattress this year and the furniture store I purchased it from included a new set of sheets and bed rails for one lower price.  It was a great deal!

Zappos has come a long way from when it first started out.  Zappos started as an online shoe company and slowly grew to carry multiple clothing products.  Zappos is known for their great next-day, free shipping.  Zappos also has free returns.  I love shopping at Zappos because there is never the worry that I will order a product, dislike it, and not be able to send it back.  Zappos is well-liked buy shoppers because of its uniform delivery pricing.  Uniform delivery pricing is when the shipper charges one rate, no matter where the buyer is located, which makes things very simple.  Zappos offers free shipping and its customers love it!

Vanity clothing stores are one of my favorite places to shop for a BOGO.  For those of you that don't know, BOGO stands for buy one get one.  Usually Vanity will have buy one get one 50% off, which is a great deal.  Some stores will even do buy one get one free.  A BOGO is an example of loss leader pricing.  Loss leader pricing is when the store lowers the price below the store's cost, so the store is actually losing money.  However, loss leader pricing benefits the buyer and that's the reason why I love it!

Happy Shopping!

Complementary and Substitute Products

Complementary and substitute products are an interesting concept, in my opinion.  When I think of complementary products, I think of peanut butter and jelly.  It's the thought that those products are both needed to make a PB&J sandwich.  If one of those products is missing, you can't make the sandwich.  They are both demanded at the same rate, therefore they're demand rises and falls together.  Suggestively, if peanut butter sales are down, chances are good that jelly sales will be down too.

When I think of substitute products, I think of hot dogs and hamburgers.  If someone wanted to purchase a hamburger and it wasn't available, they would likely substitute it by buying a hot dog.  They are similar, yet different products.  Therefore, changes in their demands are negatively related.  This means they rise and fall opposite of each other.

                                                                          Yummmm!

Ann Taylor Loft

Ann Taylor Loft is one of my all-time favorite clothing stores.  They are on the higher-priced end of clothing stores because it is a designer store.  However, I find that you get what you pay for.  The clothes last a lot longer, are well-made, and are very comfortable.  I would classify Loft as a specialty store, which means it concentrates on a limited number of complementary merchandise categories.  Loft's categories would include: women's clothing, jewelry, sunglasses, swimsuits, shoes, and maternity.  It has a deep assortment of choices in each category, but is narrow with its choices of categories.  Ann Taylor Loft stores also have great sales associates that are always available to provide customers with assistance.  They are great at finding sizes, suggesting items, and giving their personal opinions.

Shopping at Ann Taylor Loft can also be used to demonstrate the benefits of stores for consumers in the world of marketing.  When I shop at Loft I browse the store first to see what items I like.  I can touch and feel the fabric while seeing what it looks like in person, which is very important.  After I pick out some items, I can try them on in the dressing room.  I interact with the sales associates and they find me different sizes or suggest other similar items.  They provide personal service while being entertaining and social - actions that couldn't take place while shopping online.  When I go to the counter to pay for my items, I feel assured that if there's a problem with any of the items I can return them.  This reduces my feeling of risk.  I can pay for my items with cash, which isn't possible with online shopping.  After I pay and leave the store, I feel immediate gratification that I made a good purchase.

Ann Taylor Loft is a wonderful place to shop and I highly recommend it!

Minions - Despicable Me Prequel

I absolutely love these little yellow fellas!  I think they are so adorable! You can imagine how excited I am that the minions are going to have a movie that is all about them now, called Minions.  It is the prequel to the two Despicable Me movies.

All of the Despicable Me movies have had great advertising.  In fact, I was walking through Shopko yesterday and noticed toys that had minions on them. I even saw a pair of pajamas with minions.  

Another exciting advertising breakthrough for this new movie that was released yesterday (July 10th) is its partnership with Amazon.com.  Amazon is delivering boxes to customers that have minions on them.  This is the first deal Amazon has ever made to sell advertising space on its boxes.

Tic Tac has also helped advertise the new movie by releasing limited edition minion Tic Tacs.  The Tic Tacs are banana flavored and have faces of minions printed on them.  They are simply irresistible and yes, I did buy some even though I don't like Tic Tacs.  The minion ones taste pretty good!

These are just a few advertising techniques that have been used to promote the new Minions movie.  Most of these advertisements are informative advertising and are trying to create and build awareness about the Minions movie.  The ultimate purpose is to encourage people to go see the new movie, but at the same time the products, like Tic Tac, are gaining new business from fans of the minions.  

This advertisement also incorporated the use of social media because people who received a minion box from Amazon were posting their pictures on Instagram and Facebook.

The advertising for the Minions movie has utilized integrated marketing communications to advertise to customers about the product, market the product online and through social media, and promote the movie through other brands and products.

I'm looking forward to watching the movie!

InTouch Magazine and The Duggar Scandal

I'm sure most of you have heard something about the molestation incident involving Josh Duggar and his younger sisters.  It is the topic of many news broadcasts and the center of multiple magazine covers.  However, there was one magazine that received the most media attention from this issue and that magazine is InTouch.  InTouch is the magazine that illegally leaked the police reports from years ago when Josh Duggar was 14 years old.  Looking at this issue in more detail made me think about the choice that InTouch made by leaking those reports from a marketing standpoint.

Any choice that is made in marketing has ethical problems or decisions attached to it.  In my marketing class, ethics has been the topic of many discussion boards.  Before InTouch leaked these police reports they had to decide whether it would help them or hurt them.  Personally, I think it could be helping them sell magazines while the issue is still being discussed, but once that subsides it could ruin their credibility.  This relates to brand association in marketing terms.  A brand association is the link a consumer makes between a brand and its key attributes.  Plus, this could effect InTouch's brand loyalty.  Brand loyalty occurs when a consumer buys the same brand's items repeatedly over time.

When InTouch released this story illegally, it made me think of InTouch as a product.  In fact, a consumer product that is for personal use.  As a product, InTouch also has packaging.  The packaging for InTouch is the most important part because it draws the consumer in.  If the consumer isn't interested in what the cover says the issue has to offer, she won't buy it.  This could be the main reason InTouch chose to act illegally to draw in readers.

On a personal note, InTouch clearly wasn't thinking about the effect his would have on the victims in this situation.  At the time of the incident, they disclosed completely personal information, feeling that it would be kept confidential forever.  The original wrongdoing was when the police department provided InTouch with the reports, but InTouch made the decision to out the Duggars.  I watched The Kelly File on Fox News last Friday and it was heart-wrenching to listen to two of the victims talk about the incident, their revictimization, and the emotional trauma they have been forced to deal with for a second time.

The Duggars' show, 19 Kids and Counting on TLC, has been temporarily pulled.  However, the permanent fate of the show has not been determined.  We will have to wait and see what happens.