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4. Schoder, The Price Isn't Right, 2010 (Price Strategy)

4. Schoder, The Price Isn't Right, 2010 (Price Strategy) -...

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The Price Isn’t Right By DETLEF SCHODER And ALEX TALALAYEVSKY AUGUST 23, 2010 http://online.wsj.com/article/SB10001424052748704107204574469331141323104.html Everyone knows that companies have rock-bottom prices they're willing to offer in emergencies. Think goods and services whose value is about to expire: hotel dates, plane tickets, last season's fashions, packaged food. But until recently, not many people knew what those prices were. Keeping them under wraps is a key part of how companies maintain pricing power. Well, the secret is out. Now, thanks to the Internet, consumers are able to figure out those prices. And that is creating huge headaches for the companies. Online shoppers today aren't just buyers; they're also product reviewers, technical consultants and scouts for legions of fellow shoppers hunting for bargains. Many use Web sites where links are posted for online coupons and cash-back offers—deals that some companies didn't intend to circulate so widely. Others go to sites where people discuss how to find the lowest bids acceptable on travel-service auction sites. Even shoppers for big-ticket items like cars get an edge from sites that reveal prices paid for new and used cars. Further assisted by search engines and so-called shopping bots that find the lowest prices for any number of products, shoppers today have unprecedented power to buy products at the sellers' rock bottom. But if they come to expect such prices all the time, companies could see their long- term pricing power erode and profits slashed. Here are eight tactics companies can use to limit the ability of bargain hunters to find their deepest discounts and lowest acceptable prices.
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1. What are people saying about you? Shoppers find the lowest prices in different ways. Some cruise coupon and special-offer sites, like RetailMeNot.com and fatwallet.com . Many users of travel-auction sites like Priceline.com and Hotwire.com first visit BiddingForTravel.com or Betterbidding.com for bidding strategies and Firms can search such Web sites and discover ways in which consumers are taking advantage, perhaps by combining discount offers or coupon codes. Companies have various options for discouraging such activities, including canceling codes or revising coupon or discount policies.
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