Sunday, July 22, 2007

Hypermarkets with Promotions Budget

The latest controversy regarding bookshops in Malaysia not willing to sell Harry Potter's last book due to the hypermarkets selling it below distributor's price is even mentioned in under the heading "Harry Potter and the Deathly Hallows". Interesting.

To my personal opinion, it is a very good economic move by hypermarkets to actually make a loss of about RM5 per book just so that people will swarm the outlets. They will in the end purchase other products of the hypermarket which will easily set-off the 'loss' from selling the book.

Legally, it's totally sound. Ethically, no. Not to me at least. But ethics goes to the back of the alley when it comes to profiting in most business. Unless it affects the business in the future, they will go all out on getting profits at the cost of ethics. In the current case, the hypermarkets have just made good friends with Harry Potter fans in Malaysia, and made enemies with bookshop owners.

However, being in Malaysian and its culture, there will be no public protest or even placards or revenge from the bookshop owners. I bet the CEO of Popular, or Times, or even MPH would just visit Tesco or Carrefour for their next groceries shopping within a week.

However, let's look at the strong capacity of hypermarkets. They are allowed to sell ANYTHING, this means that when one single product suddenly become soooo hot, they can just throw it into the promotions budget and still get a profit from any of the "single product" purchasers' visits.

Should Star Wars suddenly come out with a compendium of all 6 shows with extra footage and it comes hot, hypermarket would just slash about 10% to 20% from distributors price and make a loss which eventually would make good earnings. Heck, just a month ago even motorcycle was sold in the hypermarket competing against motorcycle shops out there.

Sigh, the force is strong in hypermarkets.

1 comment:

Anonymous said...

i'm a true fan of harry potter. so i bought the rm109 at kinokuniya (and i got a quill as a free gift) :D but then i got 20% discount, which i didn't know until i paid for the book.

eventho it is kinda expensive, but it's worth it, to me lah :D