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Marketing

The problem with marketing qualifications is they tend to be overly simplistic and make the flawed assumption that multi nationals and small businesses can be lumped into the same group.

Walmart sells thousands of commodity products which they don't manufacture. Thanks to their retail power they are able to turn to customer supplier relationship on it's head... if you want to supply supermarkets with Milk for example the supermarket buyer will tell you the price you are going to get. As it's impossible to sell milk in volume you need the supermarket more than they need you, ergo the supermarket dictates a very low purchase price which makes them a healthy profit upon resale in their stores. It's also worth pointing out that most special offers and promotions run by supermarkets are paid for on the suppliers Dollar. A supplier will be told "hey we're doing a buy one get on free offer on your product so you need to supply twice the volume at the same price". Walmart is generous with promotions because ultimately they aren't paying a dime for anything.... the supplier takes all of the financial hit.

Walmart is a in a strong position precisely because they are in position where they can bully and intimidate their suppliers into these promotional activities. Walmart DOES not drop their profit margin at any point... promotion or not the supermarkets continue to make the same return on sales... the supplier of the product on promotion is a different story.

In the small scale sign & display business context the promotional activities you embark upon are paid for entirely by you and your profit margins. Suppliers in this industry aren't going to offer sales support, they aren't going to donate rolls of material and gallons of ink to support your promotions... you've got to pay full suppliers list price. If Walmart were in the same situation their promotions would number virtually zero.. .promotions which cost them money= bad. Promotions which cost them nothing= good.

In any case the comparison between companies like Walmart & Coke is flawed. We all make bespoke, one off products to order. There are none of the same economies of scale and there is no ability to bring mass production into the mix. Moreover, companies like Coke sell a product which costs virtually nothing to produce... a can of water, some cheap processed sugar and some flavouring, total production cost of no more than 5p. Retail this for 65p and you're making a hefty profit which means there is plenty left for marketing & promotional activity.

Following the marketing systems used by multi national food manufacturers and retailers can lead you to make false assumptions and also invest money in the kind of promotional activities which will never produce a worthwhile return.

Andy,

Original point was over giving discounts and how they relate to coupon marketing - only on a retail basis, but thanks for the great lesson on how Walmart thinks. Every single thing I (and I guess everyone else here) does is a one of kind product that didn't exist anywhere else in the world until I created from mine or a customers design and to me thats worth quite a bit - but in the end (relating to your pattern of Walmart dictating price to suppliers) my pricing will need to reflect what the market will bear around here for the types of services I produce and even though I may be able to produce that new product for a client - i am certainly not the only guy around who could do the exact same thing - so my pricing structure surely better be in line with what my top 5 competitors is or I will lose out on jobs based solely on price alone - which is why I don't see why guys in this business put pricing on their websites - you would get executed from the potential job before ever getting to quote on it.

Saw a post a few weeks ago where Home Depot is getting into signage. Think what would happen if Walmart entered the signage arena on a retail basis...

$2 square foot for banners would be gold then

 

[Colin]

......which is why I don't see why guys in this business put pricing on their websites

I wish I had a dollar for every time someone phoned and said something like: "How much are your sandwich boards - I don't see any prices on your website". Even though it says clearly that prices depend on what kind of SB, size, quantity, and what's involved on my part in terms of artwork/layout/design etc.

How is it people don't get that? I guess the masses have been "trained" to shop in a retail fashion.