Black Friday!!!

Hey Guys!! I hope you had a wonderful Thanksgiving!! Last week in my marketing class, we talked about pricing and one thing that came to my mind especially with Thanksgiving coming up was Black Friday & Cyber Monday. Since, we host Thanksgiving at my house, I don’t really participate in Black Friday because I just don’t have the energy to stand in lines early in the morning for deals. I guess it is just not that big of deal to me. However, for some Black Friday is more than a one day affair; we all have seen on the news those people that start camping out in front of stores hours in advance with some starting days in advance. To each his own but I can never see myself doing that.

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These people aren’t “crazy” though, if you find a need/want for the products on sale I say go for it. Some of those discounts are insane and that is what drives people to the stores right after Thanksgiving Dinner. Retailers are making their Black Friday sales better every year in hopes of attracting more consumers than before. Not only that but they are starting before actual Black Friday, many retailers start their Black Friday sales on Thanksgiving Day. This is crazy because Thanksgiving, a day that is supposed to be for family is slowly turning into a materialistic holiday. With more retailers opening stores on Thanksgiving, not only does it push employees away from their families but our society’s growing need to have more stuff soon enough these sales will draw people away from their families.

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Now to relate all of this to my marketing class, one of the things we talked about where the steps that a company may go through to reach a price for their products. We talked about the first one (Identify Pricing Objectives & Constraints) in the last post. This one is relevant to the Black Friday sales because retailers have to look at what their competitors are selling similar products for. One strategy for this is for a retailer to price their item lower so that they can get more traffic in their store and hopefully increase their profits. This ideal goes with the step two of this process which is to, Estimate Demand & Revenue. Seeing as though Black Friday is such a huge day for retailers, the demand for various products is very high and retailers can use this to their advantage with their pricing.

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The final step is to Determine Cost, Volume & Profit Relationships. During the Holiday Season, retailers have to pay close attention to their costs because they may have extra workers to combat the increased traffic. Most people would think that having the lowest price would benefit a retailer as it would draw consumers to their store, however this is not always the case. If the price is so low that it prevents them from breaking even then this will surely hurt their bottom line. So with all of this in mind, the ultimate question is do retailers make a substantial amount of money during Black Friday and Cyber Monday? With all of the additional costs from having more employees working substantial hours to having the power on for longer than normal operating hours to the extra advertisement, it can be more difficult to make a profit. Another thing to consider is that although the deals may be insane, our society is very technologically based and online deals attract more people than combating massive crowds when there aren’t nearly enough items to go around. So many things to consider. Well thanks for joining me today guys, until next time!