Do you think this is a good market strategy for Best Buy? Do you think this policy will help with Best Buy's poor stock performance?
Best Buy is a great store to find quality products. Going to the store and actually holding the product makes the purchase easier. I do not think this is a good market strategy for Best Buy. I believe they will lose profit because a majority of their sales occur online. Customers can just go to Best Buys competitors to buy the same product online for a cheaper price.
Thursday, April 11, 2013
Pricing
How does Banana Republic make a profit when they have a line of products that are discounted?
If Banana Republic discounts their clothing 80% more people will come and buy their clothing so they will make a profit if they sell the maximum number of discounted items. If they do not make a profit, keystoning is an example of what can happen. Keystoning is the practice of marking up prices by 100% or doubling the cost. If people are dedicated customers they will buy their product even if the price went up. All companies want to accomplish in their business is to reach their breakeven point.
It also depends on the demand. The change in the price will have a big impact on sales.
Why did Banana Republic discount their products by a large amount?
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