Thursday, October 11, 2007

Variable Marketing Offers

You see something advertised as so many pounds or dollars or per cent off the original price. Does that fact make any difference whatsoever to your decision to purchase it?

Unless you are a complete alien to that shopping environment then the answer is clearly no. The offer should make bugger-all difference to your decision to purchase. When you are shopping then the two main factors are "I have this much time and money to spend" and "I have this much value to obtain". The third factor of "this is how much I have 'saved' versus some totally notional figure made up by the retailer" is completely irrelevant.

Nobody has the complete information of free market economic theory. But we generally have enough information to decide whether something is worth buying.

I know the things stated here are sometimes very obvious. But then I look around and see people who really do seem to choose on the basis of what they think they are saving instead of what they think they are buying. When describing a purchase some people really do glory in how much they have "saved".

There is no absolute line, we all take many factors into account. But some are just lunatic.


Ann said...

There are two types of saving when making a purchase.

1. The discount that brings an item to a point where the item seems to be value for money when previously it had been too expensive. This is glorious because it has made something that was out of reach, within reach.

2. The discount that is unexpected. i.e. the item was going to be purchased anyway but there is an additional saving apparent at the point of purchase. This is glorious because it is good fortune and also makes more money available for more purchases.

Plus everybody loves a bargain and it's a chance to spread good news. If I tell someone about where I obtained a bargain, I'm helping someone else save money.

But I think I'm fundamentally agreeing with you because I buy because I want something, not because of the discount available.

RNB said...

2. The unexpected thing is just free money. We all like that ;)

1. But I was talking about the variable marketing offer. There is no such thing as a "saving". The concept is ridiculous. You pay your money. You get your purchase. It could be good value or not. But how much you "save" is irrelevant.

Ann said...

1. The saving is important because it is that which makes something affordable. And people aspire to things they can't afford, so when they become affordable it's worthy news.

RNB said...

Still, No.

I started with "variable marketing offer" rather than "saving" to make it clear - to the seller, the saving is a reduction from a previously uneconomic price to one that should perform better.

To the consumer, the saving is still irrelevant. What matters is how the value of the item purchased relates to the cost - whether this is a result of you finding an "underpriced" item that has just appeared or an old item previously on sale at a higher priced does not matter.

So the concept of "bargain" makes sense, I never disputed that, but the concept of a "saving" does not.

Anonymous said...

Hmm hmm hmm hmm !