>>TSIG success as far as the e business is concerned will be based significantly on the
low price which is a result of their marketing plan.
Being a cautious investor, I can't assume that they will have success, or that their prices will remain low relative to other etailers.
>>As Ellen pointed out there is
significant cost associated with the traditional on-line marketing upon which
Amazon, CDnow, MusicBoulevard, Shopping.com and dozens of others are based.
As long as they rely on advertising to retain customers, significant cost is added to
the sale of product.
As far as I know, they don't rely on advertising to RETAIN customers. They rely on customer satisfaction and their established brand name. I am not a fan of Amazon myself, and even doubt they will exist 5 or 10 years down the road, but for now, they dominate. They will continue to spend whatever money necessary to try to outdo the competition. They're not worried about making a profit for now, and that makes them an extremely dangerous competitor.
>>I really doubt that they could easily abandon their existing
marketing concepts and move solely to a TSIG type model which I believe would be
necessary to compete on price and profit.
They wouldn't have to abandon their existing model, they would just have to add a coupon/card. They wouldn't need to compete on price or profit, they would just have to wipe out the competition.
>>Certainly not in a matter of weeks.
How much time would it take to call Phil Esposito (or any other sports promoter) or the NMF (or any other charitable organization) or Babe Ruth (or any other amateur sports league) and say "We can offer you the same thing as that little company, but with our established name, you will have greater success in selling, plus you can be sure we will be around in the future to serve you.", blah blah blah.
Whether it's true or not, they could make a very good case for dumping TSIG and working with the number one etailer, Amazon. Then Amazon would just print out some coupon/cards. Of course, besides phone calls, they would sell the "Amazon Card" and attract organizations through their already popular website or they could just advertise their card through their many contacts. Could put an end to TSIG's growth in a matter of days, actually, if they put on a media blitz.
(They could also buy out TSIG, would be thrilled if they did, but it's not something I would count on!)
I do believe TSIG has a chance to be big, but it's far from automatic. They will have to execute, and deal with growing pains. Nobody on this thread ever talks about expenses. Won't there be a tremendous increase in expenses from all the recent growth? How much will training new employees cost? How much has been spent on new facilities? How much did the new web site cost? How much will TSIG pay in legal fees? How much will this new PR company (the one that includes Amazon on their client list) cost TSIG? Will the new PR company insist that TSIG start to take the same approach as AMAZON, in other words, increase spending in order to increase name recognition? Just something to think about...
Joe |
