When you negotiate with a mass retailer, it's always a fine line situation,
they have the big stick, which is going to another vendor, and subtracting
millions in sales and profits from your company going forward.
John,
About toeing a fine line...
I got the sense that SanDisk is in an uncomfortable position
where they are trying not to undercut "brick-and-mortar" retailers
with bargain basement pricing on "click-and-order" e-tailing sites.
This is also a mine field where you need to tread carefully.
My opinion is that the brand identify signal is much clearer
if you dominate an end cap at BestBuy or some other national
electronics chain compared to having an on-line fire sale in order
to match a competitor. On the other hand, most people buying flash
memory cards are pretty Internet savvy and are willing to hunt
around for a good deal. You would hate to miss out on that
opportunity, although brand loyalty likely takes a back seat
to pricing in this instance. Either way it would appear that
consumers stand to win.
Regarding branding, as I mentioned earlier it would appear that
Viking has also paid for banners, links, the "Memory Finder" calculator
and other knick-knacks in order to boost their brand presence on
Amazon. I find it a bit odd that SanDisk would agree to play second
fiddle to Viking given the fact that SNDK has had more
stock made available to Amazon customers. OK, if both companies
have heavy inventories I can imagine a price war, but not in a situation
where there are upto 2 week (or more) delays in product availability.
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