Australian Newsagency Blog

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The Mexican wave of major brand discounting

Mark Fletcher
January 28th, 2009 · 7 Comments

In the home stretch of the Back To School sale season it seems that everyone is selling Reflex paper at a discount. The best price I have seen is $4.75 a ream. Reflex is the best known copy paper in Australia, it is a brand consumers trust. Given this respected position, why does the brand need to be treated poorly with such massive discounting?

I understand that retailers use Reflex as a loss leader. They are only able to do this because their supplier supports these efforts. The more they support such steep discounts the more national retail brands will demand the deals necessary to match the price.

This is why Reflex is cheap at one national retail chain and then another and then another. It is like major liquor brands – the discount moves around retail chains like a Mexican wave.

We have not played the Reflex price game for several years and are better off as a result. We have Reflex at a fair price with a fair margin given the stock and floor space investment. Our Reflex offer is around convenience.

We use a lesser known brand as our price point paper offer. This offers us a better margin than trying to match Big W, Australia Post, Officeworks and others on Reflex price. It also offers us a point of difference.

By refusing to join the Mexican wave of discounting respected market leading brands, we are respecting these brands and all they stand for, our business and our customers by pricing product based on true value.

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Category: retail · Stationery

7 responses so far ↓

  • 1 Angelo // Jan 28, 2009 at 8:44 AM

    You’re right about it being trusted and respected. Unfortunately (in my opinion) Reflex seems to sit in customer’s minds as a benchmark for the highest copy papaer quality. I agree it is good but I find some other brands equally as good which we sell for the same price as the discounted Reflex from Aus. Post, Woolies etc. We do our best to explain

    Our copy paper sales for an alternative brand are respectable but I find it a push to compete with Aus Post who will deliver this supposedley superior paper to your door for $4.95.

    Getting consumers to try and trust an alternative brand is an art in itself and not an easy one made only harder by the likes of Aus Post etc

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  • 2 Chris // Jan 28, 2009 at 9:32 AM

    We don’t discount reflex except for the mid year catalogue. We don’t sell a lot as we are close to post office, but its usually on weekends, for convenience as mark mentions. We also try to not get invovled in price matching with post office. Noticed this year that the post office, who usually discounts the “ezy 2 C” Calendar to beat our price, didn’t even have stock this year. So our customers at least know we have the stock each year, not just to try to out sell the post office.

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  • 3 glen // Jan 29, 2009 at 2:00 AM

    One only has to look in the Newspower BTS catalogue to see how our industry is bastardising well known brand prices on very heavy and un-necessary discounting. If I was still a Newspower agent I would be ropeable. On their advertised prices it is very difficult to make any money.

    Discounts are not what drives the customers. It is service, product knowledge, service, convenience and service. These will win over price every time. There is no need to cheapen the value of what we offer at BTS time. Our service and expertise has a tangible value and parents are willing to pay for it.

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  • 4 Mark // Jan 29, 2009 at 6:40 AM

    Glenn,

    The Newspower BTS catalogue is a seasonal pitch designed to help newsagents compete. While there are some brands which are discounted, my post was more about the cyclical nature of discounting of Reflex outside the seasons.

    Mark

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  • 5 David R // Jan 29, 2009 at 7:48 AM

    Why discount at all .Each year we run an out post for 4 weeks .7 tables which is at the other end of the centre .Self service with some help no prices are cut but if you spend $20 you get 20% off.IN the shop this year we still keep our full prices no discount but full service it has been an increase of 34% over last year People are paying for your service and what you know . All the schools in area do have a supplier why give it away People know the pay more in newsagents but it is service and they come to you for it .It is the some with mags and papers if there is promo on you are the man

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  • 6 SHAUN s // Jan 29, 2009 at 8:19 AM

    David i agree with you we leave our prices the same all year round and at back to school i have never had a problem with people paying the price we charge ,it is all about service for back to school, people love the fact that they can drop off there book list and pick it up when they are ready ,try doing that at Big W ,for this reason i do not know why newsgaencys cut the guts out of there prices this time of year

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  • 7 Albert Ross // Jan 29, 2009 at 4:22 PM

    “cyclical nature” – did you mean “cynical nature”?

    You also missed a great opportunity for playing on the word “Reflex”

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