WFU Consumer Expert: Bargains May Have A Big Price
Reposted from North Carolina News Network | by David Horn
(WINSTON-SALEM) — As retailers resort to slashing price to attract customers now, the long-term price may be quite large. That is according to Sheri Bridges, associate professor of business at Wake Forest University.
Bridges is an expert in branding and consumer behavior. "When a brand goes on sale, it gives away part of the profit margin needed to invest in future innovation and quality," said Bridges "This affects the consumer's satisfaction in the long run because the company cannot afford to develop the newer and better products we all want."
Bridges said it is only logical that as companies live with reduced profit margins because of huge discounts, they will eventually have to reduce the quality of their goods and services. She contends that there is a better way.
"In reality, consumers are more interested in high value than low prices. Value is a function of the bundle of perceived benefits offered at a given price." She sited Apple as a brand that offer a high value without having to discount its products.
"Selling products at a discount is like paying someone to like you," said Bridges. "Good marketers know that sales aren't necessary, if you're providing the right value to the right customer."