Small Business Today Magazine APR 2015 POSSIBLE MISSIONS | Page 26

EDITORIAL FEATURE

Avoiding the 3 Types

of Price advertising
BY HOWARD PARTRIDGE

O

ne of the worst things you can do
in marketing is advertise price
before value is proven. The most
common type of price advertiser
is the one that advertises a ridiculously
low price but never intends to honor that
price or there is only one in stock at that
price. These price advertisers could also
be categorized as a “bait n’ switch”. They
bait the prospect with a low price to
get them in the door and then once the
prospect is generated, they switch them
to what they really want to sell. In the
worst case, the company would even refuse to offer the low price service which
is totally a deceptive trade practice. Do
you have bait n’ switch operators in your
industry?
The bait n’ switch advertiser is only
one of three types of price advertisers. The second is what I call the value
choice. The value choice, unlike the bait
n’ switch is a legitimate business model
but has intentionally positioned itself as
the lower price alternative. Think of how
Southwest Airlines began in business.
They intentionally positioned themselves as the low price alternative and
they were very focused about running
their business model accordingly. Not
offering meals on their flights, their
point-to-point routes, open seating,
and the revolutionary “10 minute turn
around” policy have helped keep their
costs down so they can offer lower fares
and still make a healthy profit. This model doesn’t work for a small business that
doesn’t have the scope or infrastructure
that a large company has.
This brings me to the third type of price
advertiser. The third type of price adver-

“

he can’t compete with their
margins. he doesn’t have the
management infrastructure,
the capital, the brand image, and
the television commercials
that the larger company has.

”

tiser is the small business that doesn’t
have the management infrastructure,
the reach, and cannot handle the volume
that a larger company can. Let’s think
about a plumbing company. If a plumber were a smaller operator, why would he
want to match the price of a bigger operation?
He can’t compete with their margins.
He doesn’t have the management infrastructure, the capital, th H