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Strategies & Market Trends : ahhaha's ahs -- Ignore unavailable to you. Want to Upgrade?

To: DMaA who wrote (20158)	12/14/2011 9:38:36 AM
From: ahhaha	Respond to of 24758

Typically intense competition has led to the condition where withing a radius of a few miles every store has exactly the same price plus or minus a few cents. Wrong read. When they all hide behind some price they're indifferent to top line. Lately, in the Twin Cities I am frequently seeing the store on the north side of the street as much as 25 cents higher then the store on the south. Transient loss leader strategy. Trying to grab the marginal customer. And 3 days later the situation has been reversed. I have never seen such large disparities in small geographic areas. During the '50s often there were gas price wars between gas stations rather than between suppliers. This changed when the structure of ownership shifted to franchise. And it occurs to me that this could be caused by a significant shift in consumer habits. That the DM depression is forcing people to actually shop for gas. People have always spent 3 extra cents to drive far away for a lower price. It's psychological. Which is as easy now as consulting an app on your phone that will tell you where to find the cheapest gas within any distance you choose. But the app doesn't include the cost to effect. I believe that the big chains have sophisticated pricing models fed by almost real time sales information. Hardly. Franchisers watch commodity prices and get daily updated bulletins from their providers as to their wholesale rate. I wonder if the assumptions built into these models have become invalid and the executives in charge of pricing don't know what to do about it. Even though information distribution has gotten way more efficient local conditions and franchiser strategies under competition has caused a move to product diversification. The question they ask is, "what can I do to differentiate myself from my monolithic competition"? The only answer is, shake up market perception with strategies like loss leader. Gross example: AMZN's Fire.