The Price is often Not Right

Fact. We're all sucked in by marketing positioning on best price. No matter how long we've been consumers or actually in the game. 


Here in New Zealand, Mitre10 is a good example. Byline: "Best price. End of story." Well, actually it's neither best price nor end of story.


In Mitre10's campaigns - yet interestingly not on their website, where people are far more able to quickly match prices - they promote a 15% guarantee. This states that if you find a better price from a competitor for the exact same item (they get to define competitor), they will not only match that price but charge or reimburse you at 15% lower. Sounds good, for a consumer, and it's not too bad a positioning for a marketer to assess.


Marketing texts, when I did my MBA in the 90s, were full of examples of those who offered guarantees and those who didn't. It was a growing experiment of the time. Overwhelmingly, those who didn't offer any form of guarantee (aside from their legal obligations) stated financial reasons. Those who did also stated financial reasons.


In the former, companies worried about claim exposure. In the latter, companies understood better not only the customer's access to information, but the personal cost of follow up. Their argument, robustly proven over the years, is that the inflow of customers who felt comfortable and secure based on the promise far outweighed those who took the company to task at the business' risk of line-item margin.


My purchase decision today was based on that same sense of trust and security. I went slightly out of my way to purchase lightbulbs in bulk at a Mitre10 Mega. I try to support our local community supermarket wherever I can, to the extent that I buy at a premium often. I know it, and it's fine. Their access to national contract pricing is poor. But that company is here in our small town, keeping people in jobs and adding to economic wellbeing.


When it comes to bulk purchase - which four teenagers in a household will force one to consider, after summing the food bill on the bank statement (toilet rolls and milk, anyone?) - we shop accordingly. Moore Wilson's is good. So long as you don't buy the smaller quantity, less consumed items, you'll buy fine. 


So, I presumed Mitre10 would be a location of good value for lightbulbs. I have a trade account, so I figured: good price, even better with the discount. Not so.


On the way home, I stop into the community supermarket to buy dinner and casually check the lighting area. The same lightbulbs, $3.02 each at Mitre10 - less my discount, so $2.57, are $2.25. 


None of us will never buy the absolute best every time. If we can manage that, we're probably compromising a bunch of other things in our lives. However, it's a lesson to me today that if I'm too sucked in by marketing to the extent I presume where I will get the best price, I've learnt nothing from 25 years in the game. 


...I bought extra lightbulbs tonight from the supermarket which I don't need. I also don't need the chase-up on Mitre10 for the pennies under their guarantee. I'd rather devote the energy to talking about it.



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