DOLLAR SCHEME Essay

Submitted By mjpor1

Words: 479

Pages: 2

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NO

The “dollar special” campaign will not be proposed within our final strategy nor should be totally explored in general. Despite this type of price promotion embraced the concept of greater foot traffic at Reed being (3%), there overall concept however leads to negative margins within the long-run especially for our program thus being in-efficient.

With our proposed strategies and tactics explained by Adele, Reed Supermarkets cannot afford to have even lower margins that this promotional avenue will produce, as money needs to be widely spent on new tactics. The company essentially must ask one question and that is at what cost? The case study stated, “the average price reduction was from $2.70 to $1.50, and since few if any of the items were purchased “on deal,” margins were overall lowered.

The scheme itself is not equitable for our strategy as it defaces what we propose in providing high-end quality products at a premium price that consumers expect and are willing to pay. Removing Dollar Specials ensures a brand-image of specialization and quality for Reeds in which removing itself of this type of price promotion, leads to separation from general competition such as Trader Joes who compete at this “dollar” price level and are known for “lower level products”.

The new consumer loyalty promotions proposed further contradicts the dollar scheme, through offering a new price point for Reeds consumers. As we want to meet that 15% of market share, the dollar scheme enforces a continuous loss through its promotion.

Essentially the core negatives of the dollar scheme and irrelevance to our strategy are that:

Net profit margins are inequitable
Confusion may be evident among consumers mistaking Reeds as a low-end/wholesaler store.
Brand Image seems cheap which contradicts our strategy
Finances become volatile

The basis of this

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