Quote:
Originally Posted by SteveEisenberg
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. |
I would much rather have the loss leader strategy, as I shop sales. I have a large pantry and chest freezer, and when things go on sale, I buy them in quantity. For instance--chicken legs are on sale this week at one grocery store for $.89/lb, and I'll buy 5 packages--the max amount that can be purchased by one person. Another store down the street has canned tomatoes and pasta on sale, and I'll buy the max of those at that store. Since these stores are all in a line on the same road within a couple of miles of each other, it won't cost me any more in gas, and not much more in time.
I can understand that if you don't have room to stock up on items when they go on sale it may be better for
you if stores do the everyday low price strategy, but that doesn't mean it's better for all consumers, any more than the loss leader strategy is better for
all consumers. The marvelous thing is that we have choices. Just like you have a choice to buy from Amazon or not.
Shari