Thursday, May 17, 2007

Toshiba bribing customers to take an HD-DVD player home

So it begins:

TWICE: Toshiba Offers HD DVD Rebate
Toshiba is running a one-month promotion issuing an instant, in-store rebate on select HD DVD players that will bring the purchase price on the entry model down to $299.99.
The effort will coincide with the HD DVD Promotional Group’s new national marketing and retail campaigns launching this month in support of the Warner Home Video HD DVD releases of “The Complete Matrix Trilogy” and “Letters from Iwo Jima,” and the Paramount Home Entertainment HD DVD release of “Flags of Our Fathers” on May 22.
The Toshiba in-store rebate promotion begins this weekend (May 20). Consumers buying a Toshiba HD-A2 model player will receive an immediate $100 instant in-store rebate, the company said.

Okay, lets go over Value-added Marketing 101 again. You can sell on price, or you can sell on value. If you paint a beautiful picture for the customer of how much value your product has, what it will do for them, and how great it will make them feel, the customer will pay full price for it.

If you can't or won't tell a story that connects with customers, you will have to discount to make a sale. You lose. You lose money, you lose prestige, and you lose the customer's respect. You are no longer the gatekeeper to a wonderful promised land of consumerism, you're just a doormat, and the customer knows that he can walk all over you.

Toshiba should ask GM, Ford or Chrysler what paying customers to buy your product does to the bottom line.

This will end badly.

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1 comment:

Anonymous said...

I disagree. I don't automatically think a product is crap if it has been discounted or rebated. Granted, I hate rebates to begin with. But a promotion is a promotion. If you're pushing the price, it'll start low to begin with. A discounted price could mean they're trying to get the customer's attention. If the profit margin on them is already good, all they're doing is getting my attention now with a "deal". And I'll take a deal any day, just like any other consumer out there. I got an instant grad discount on my car a few years back - that didn't automatically make me think it was a dud with no value! (P.S. No, it wasn't a GM, Ford, or Chrysler!)