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December 2010

Comments

Traduceri

You are right. "Discount coupons" is a national sport nowadays.
Hope you have a fantastic 2011!

bathroomsguru

Likening cocaine to coupons. I think there's an underlying reason to this little story.

Joel

But as your sales decline while every competitor is discounting, what are you supposed to do? Wait it out until they stop? By then, you won't have a job or your company has gone under. No one likes to discount but when you are directly responsible for sales and that's what the competition is doing, you must.

When you have to hit a sales number but won't because you didn't discount a little, see how well that goes over. Sorry to say, but most companies are about the bottom line, not the brand image.

Retro Air Jordans

Our feet are standing in your gates, O Jerusalem.

Dave Sutton

So I guess the Groupon execs should have taken that $6 billion offer from Google...

Garfinkel

I don't entirely agree. We rarely shop at Bed, Bath and Beyond without 20% off coupons, of which we always have more than we need. I depend on these coupons because I know I will find them in my email, or snail mail, or in the newspaper.

What I think may work in some cases are sites like Groupon and RueLaLa, which have limited sales: by time period, or quantity; so many purchase decisions are based on knowing gone is gone. So, for example, on Groupon I have bought discounted meals for restaurants I have been interested in, but have not yet tried. I go into the sale understanding that it is a limited off, and I should not except further offers from that vendor. It i a trial offer. And it has worked. I've bought on Groupon, and have returned to places I like and happily paid full price.

My first pair of Cole Haan shoes was purchased on RueLaLa. They always seemed too expensive. My first pair was an eye-opener. Quality, style, and COMFORT. Since then, I have purchased several both at discount, and in the retail locations. Sure, I want to get them as cheap as I can, but if I can't, I am now willing to pay for a product I would have never bought in the first place.

While I agree in general that discounts set up user expectations, I think there are ways of limiting the expectations to help generate loyalists, but the product needs to be strong enough to support that.

Take Apple for example. You might think Apple never discounts. Well, they do. In a subversive way. Take the iPhone 3GS. A little over year ago, it cost $199 (with contract). When the iPhone 4 came out, the iPhone 3GS price was lowered to $99. Wisely, Apple does not discontinue the older model, but sells it half-off, and yet still manages to sell more than expected units of the iPhone 4. You may think they are cannibalizing potential iPhone 4 sales, but there seems to be a limit to what people will pay or can afford. This is a built in discount: someone right now may have the mindset, "why buy the iPhone 4 now for $199 when it will be $99 in just six months?" I don't doubt people do, but that hasn't stopped Apple from being the second most valuable company in the U.S. after Exxon.

Chris Houchens (Brand Zeitgeist)

Laura -- To extend your cocaine analogy, coupons are not the disease/addiction. They are a symptom of a larger problem. Most brands can't/won't think long term. All marketing & branding strategy is built to get customers this week or this quarter.

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Natlfy- It's VERY difficult to come by flour in Norway that is not all-purpose, rye, whole-wheat, spelt, or barley. Meaning, self-rising or any other type of enriched white flour is not common in the Norwegian kitchen, so i just use the regular old all-purpose for most of my baking needs.

Noah

Does anyone remember when Bed, Bath, and Beyond and Linens & Things both had 20% off coupons in the Sunday paper?

Neither chain wanted to compete based on larger selection, better service, or anything else to differentiate themselves, instead they waste their money on discounts that put right back even with each other.

Brent Davis

Too many discounts and sales make it difficult to put the genie back in the bottle. I guess it is hard to "take the road less traveled". Good article.

Paul Dushkind

They say that people in advertising burn out because they fight the same fights over and over again. Complaints about too many coupons now span generations. Still the coupons fall out of the Sunday newspaper.

A paradox: Kohl's advertises storewide sales every day, which is ridiculous, but the chain is rapidly expanding.

One of the reasons that I don't like the TV show, Mad Men, is that two episodes in the first season advocate coupons.

Kamil Ali

I spent too much on the discounting strategies, in the end, it all coems to destroy your brand.

People learn to have discount and they are addict to it. They buy from you becasue you offer discount, not due to you are a specialized brand that would solve the problem.

AL Ries taught me this when i interviewed him here: http://www.kamilali.com/2009/09/al-ries-interview-father-of-positioing.html

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