Monday, May 20, 2013

When is a discount not a discount?

J. C. Penney has been in the news for flubbing their new marketing program. They stopped offering sales and discounts and tried "everyday low prices." The new CEO, Ron Johnson, lost his job over it, their stock plummeted and now they have "apology" commercials running on TV. Old James Cash Penney must be rollin' over.

Marketing is changing. The other day I tried to make an on-line purchase from a company that sent me a 10% off coupon. I had purchased an item from them earlier at $49.95 and with the coupon I expected to pay about $45. At check out it was $52.95 after "discount" plus shipping. So I hit the X button and got out of there.

They must know when I do this because the next day I got a notice that the item was on sale at 20% off. I ignored that e-mail and the very next day I got a coupon that offered the item at 30% off. I went to their site and now the retail price was $79.95. I blocked any future e-mails from that company.

Is the consuming public really stupid enough to fall for the old "mark 'em up so you can mark 'em down" game? The majority of retailers must think so and are doing it ad nauseam. The sad tale of J. C. Penney confirms it. As a marketer I'd like to hear what you think about this subject and how it will affect our businesses.

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