Quote:
Originally Posted by DiapDealer
Steve, do you believe retailers who use loss-leader-, basket, or promotional-pricing strategies that result in below-cost prices on certain products in their inventory is being "predatory?"
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In my earlier post, I wasn't, in my mind, distinguishing between loss-leader and predatory pricing.
Googling a bit, it seems that the difference is primarily intent, and that's hard to determine. What's the difference between A&P having loss-leader today or in the 1940's? Well, today it would be delusional for the chain's executives to think their loss leaders can put competitors out of business, because the chain is so weak. In the 1940's, when A&P was the world's largest retailer, would the same exact pricing strategy be predatory? Maybe, but it seems more a legal and psychological difference than something concrete.
As a consumer, I prefer everyday low prices rather than a combination of loss leader promotions with other prices that are high. Now, Amazon doesn't emphasize that items are on sale, but I notice them frequently changing prices. The eBook of J. K. Rowling's latest is now
US$14.99 after having been $8.99 before. Motive? My guess is that when Amazon executives get together to decide on pricing, motives in the hearts of the various executives vary, and yet they will agree on a strategy.