One of the things I typically do as a retail consultant when I take on a new client is to discontinue discount marketing programs.
In fact, I often raise their prices to help them become profitable.
Before you read on, if you are one of the extreme couponers or use them religiously, this site, this blog and this post are not for you. Continue reading 7 Reasons Coupons Shouldn’t Be Used For Your Marketing »
Retailers are trying to keep up with the price-cutting frenzy of competitors, extreme-couponers and daily deal sites.
Many feel they can only attract shoppers if it is a “deal,” so that is how they are merchandising their stores.
Not necessarily smart… Continue reading Merchandising: How To Attract Retail Customers Without Discounting »
This is an excerpt from my new book, The Retail Doctor’s Guide to Growing Your Business (Wiley & Sons)
Since many owners or managers have never taken a course on pricing or they “feel bad about charging too much,” they tend to mark up less than necessary, what I call “welfare pricing.”
As a customer, we love it when you price too low but as the merchant, your apathy towards what you need that widget to produce – profits – is killing you! Continue reading Pricing Apathy – Why You’re Not A Profitable Business »
There is a great article about McDonald’s in this Ad Age article, http://adage.com/article?article_id=136601.
It talks about the long road McDonald’s has taken since 2002 to achieve profitable success. Ad campaigns focusing on the Big Mac, Quarter Pounder with cheese and chicken nuggets have stimulated demand for the items, making the quickservice chain less reliant on its lower-margin Dollar Menu items. “In the last eight months, we have placed greater emphasis on flagship-quality products,” McDonald’s USA Chief Marketing Officer Neil Golden said.
In essence they have suspended promoting the dollar menu while their competitors have carried on making up to 15% of Wendy’s sales (down from 20%) while McDonald’s Dollar Menu accounting for only 10% of overall sales. This means competitors are driving down profits and their ability to compete with the very giant who started the concept.
For retailers, we often believe the “loss leader” will increase volume but for many, particularly those without a sales training program, it erodes margins.
Just because the other guy is discounting either the hot new swimsuit or the leftover Webkinz, doesn’t mean you should join them. Look at your market.
If McDonald’s can change and only promote their high profit items during an economic recovery, why can’t you?
