It can be funny how competition works in business. It is ultimately competition that determines our prices, not the market. Crazy? Maybe not so much. Think about gas stations. They make very little off of the gasoline itself, but by charging you and I, the customers, a few cents less than the other stations around it, it draws us in. And that’s where they make their real money, selling us drinks and snacks and whatever else at a higher price than you would find somewhere like Walmart. On the bigger side of business, you have Walmart and Target, providing pretty much everything you need and many things that aren’t necessities at all. Walmart carries many of the same name brand products that Target has, and Walmart is generally cheaper than Target. Why? Because of how much they buy of a single product. Also because they provide a cheaper made product when it comes down to things that aren’t the brands we are accustom to such as their own line of home based products and food products. Target has a little more expensive line of the same things that I personally like better and I am more willing to pay more for because of the look and the slightly better quality. Target would have a difficult time selling their products at the same price as Walmart because of this. Target can stay in competition with Walmart though because of this quality and look. Crazy? Maybe a little, but it is our ways of buying products that determines all of this.
Still Kicking
Businesses such as grocery stores and gas stations do not have a high profit margin. So how do they make their money? One way is high volume. Grocery stores have to bring in more customers because the market price for food is always fluxuating, especially foods that are not prepackaged. This is also why many smaller grocery stores will sell items that have nothing to do with food. They will buy it in bulk to make more profit off of it because the cost of laundry detergent and hand soap are not as likely to go up. Likewise, gas stations do not make as much money on their gasoline as you would imagine. However, pricing their fuel is how they are more likely to make their money. They know that if they are a few cents cheaper than the station across the street, people are more likely to come. It is when you go in the store that they truly make their money. You may not be hungry when you walk in but when you see all of the candy and chips you start to think a snack is a good idea. But then you need a drink. And who has a wide variety? They do, of course! They are also priced higher than Walmart because you are paying for the convenience of a smaller store rather than a larger one. Although they may not have the largest profit margin, grocery stores and gas stations still know what they have to do to be successful.
Not For Everyone
When we think about the market, we assume that whatever company we could possibly imagine are marketing to everyone. But is that true? We would assume that because every company wants to make money, they would try to sell their product to everyone. And that is completely false. When we think about Walmart or Burger King, we can agree that they are meant to sell to the general public made up of all ends of the spectrum of ethnicity and incomes. Anyone who goes to either of these places can find something that they want or suits their needs. Not all companies are like this. I will use Michael Kors again as my example. Michael Kors markets to both men and women, and is not limited to a few ethnicities. However, the biggest difference here is the social class in which they target. Although Michael Kors is not the most expensive in the designer industry by a wide margin, they are definitely marketed to wealthier customers. Why would they limit their customer base to only those with more money? Because the perk they offer with their product is the curb appeal. When you see some carry one of their handbags or wear one of their watches, you immediately associate the owner of that handbag or watch with having money. Michael Kors does not just market to money, but also vanity in a sense. And they are doing it brilliantly in quality products to keep their customers coming back for more arm candy.
What A Girl Wants
It’s the question so many have asked: “What do girls want?” And though I can’t answer for all of my fellow ladies, I’m sure that I can answer that question to an extent. Personally, I know what I like, but it comes down to several things when I am looking to buy. If I am looking to buy gasoline, I generally go wherever is cheapest. I am bad about running my tank pretty low so sometimes it’s based more on what is closest, but nine times out of ten, I am looking for the best price. I realize that Shell has better gasoline than Jet-Pep, but when the prices have several dimes difference, I tend to sacrifice the for the lesser quality. I am very much the same when buying food. Unless I truly like a certain brand much better than most of the others, I will opt for the slightly cheaper food considering I buy a lot of it. I will likely buy the store’s brand because it is usually decently cheaper and tastes almost exactly the same if not better than brand-named. However, when it comes to handbags and shoes, I tend to spend excedingly more money than I really should. I have practically sold one of my own arms for a Michael Kors handbag before. Why? It could be that I love that it matches so much of what I wear, or the fact that I love real leather, but I do believe it comes from a slightly more shallow reason: I love the way I feel carrying it. Michael Kors knows how to make a girl feel good and powerful when carrying their handbags or wearing their clothing, and I do believe that is why they are so successful. They market their name more than their product because everyone associates their products with their customers having money. Although Michael Kors does indeed have a much higher quality product, they can sell almost anything just based on their name. For some reason, I am willing to spend an awful amount of money on purses and shoes that I really don’t need. I have too many handbags to carry and way too many pairs of shoes to wear but I keep buying them. I like the way they make me feel and having that designer name on them makes me want them more. I will think about buying something so much more if it has that designer name on it. And though the quality has been better with anything designer that I have aquired, it is mostly the feeling that these items give me that drives me to buy. What can I say? I like nice things. That could be the answer to the age-old question.
The Customer is Not Always Right
The saying has always been, “The customer is always right,” but that is not completely true. Working in retail, I thought the customer was wrong a lot of the time but as business goes, I had to abide by that saying. But when is that phrase incorrect? Many times I would think they were wrong when they could not read policies correct and demanded the opposite of what the policy said. When I would stand firm on the policy, it would be my manager that would then decide to give them what they wanted. Although that kept their business, it continued to be the same situation over and over, always having a select few customers being allowed to step over the boundaries. Maybe the customer was still correct becaue they were spending money. However, when the market is focused on a certain set of people, or a particular social class, the market caters to those people or class, such as Target being the classier version of Walmart. Some people will not shop there because it is a tad more expensive, but some believe that they can haggle and get the prices of Walmart at Target. That is like when someone goes to get a haircut, and asks for a certain cut because it is cheaper, then expecting the better and more expensive cut when it is over. It just doesn’t work that way. Customers can be entitled, thinking they deserve something better than what they are actually paying for, and in that case, the customer is not always right.
Haunting Questions
I often have, in my humble opinion, brilliant ideas. Mostly it is on my drives to work that I have these epiphanies. It could be chalked up to the fact that I wake up at unreasonable hours to be at work but I do believe I might be onto some groundbreaking discoveries. For example, while in the lull of working one day, a thought occurred to me: if we refuse to eat some foods because they don’t look appetizing, how do those who are not able to see determine what they eat? Does this mean they would eat more varieties of food? Or less because they would have to rely on touch and smell to chose their food? If they rely more on touch, does this mean they would not be as likely to eat eggs, cottage cheese, or noodles because they are not an appealing feeling? Or if they rely more on smell, would this mean they aren’t as likely to eat dishes with Parmesan cheese? And would all of this lead us to believe that there are fewer sightless customers at Olive Garden than other places? These are the questions that haunt me. And because these are not seldom occurances, I have started to jot them down on whatever I can find until I can translate my many consuming thoughts into a notebook that I have now designated for my genius.
The Thief of My Time
It could sound incredibly odd if I told you that I really am not a fan of the internet. It seems even more bizarre when when we think about the fact that I am expressing that in a blog. But it is my dislike of the internet that caused me to be very skeptical of trying any other social media besides Facebook, or the older brother, Myspace. However, I decided to take a gander at Pinterest after much provoking from many of my friends. The results shocked me. To this day I am completely enthralled by everything that Pinterest is. In my opinion, it is the greatest thing the internet has provided thus far. Spending the amount of time that I do using it could be the evidence of the specticle that it is. Before, I would print of an entire tree’s worth of recipes and pictures, but with this nifty website, I can store hundreds of cookbooks and craft projects all in one place. It isn’t only for recipes, crafts, and funny pictures, but also for fitness, fashion, and nearly any other purpose you could imagine. I am able to put my obsession of Batman in the same place as I put my longing for a healthier lifestyle. And though it is still only a few years old, Pinterest is an ever-growing abundance of knowledge, humor, and all interests.
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