ised below cost. These items are offered to get customers in the door. A retailer will offer an item at a ridiculously loss price hoping to entice the customer into their store. Once inside, the customer is trapped. The retailers plan has worked. You have entered their store and now you must look at all the other items. Usually the loss leader is in inferior product with very few attributes. However, we also have this product over here that is very similar, but it has a few more of the functions that you are after, it does cost a little more howeverOne problem that retailers face with offering sales is that it can affect their brand image. Sales can also annoy and push away loyal customers. The worst scenario for a retailer is to have a loyal customer purchase a product that is not on sale, only to find that the following week, it has been reduced drastically. This can deter customers from buying products for the full price and waiting for the sale price. Another problem that is associated with the store image is that if you are an upmarket retailer, by offering too many sales, this can bring the image of your firm down. E.g. David Jones.Retail BrandThere are many factors that go into the retail brand:Retail personalityCustomers perceptionsPositioningProduct rangePricing Retail PersonalityHow does the store feel when you walk in? When a consumer walks into a store, immediately they are bombarded with imagery. All the imagery in a store is designed to show the customer what the firm has to offer. What a person sees when they walk into a store, is what they will later associate with the store. A discount store usually has cement floors and dull looking shelves. They look cheap so that the store feels cheap. The discount store could quite easily afford to carpet the floors or cover the air-conditioning ducts or make the shelves look nicer, however they choose not to. They want the custom to see that they cut corners ever...
