Gap: Deal or No Deal
by Ryan Chan ~ March 15th, 2011. Filed under: Uncategorized.
Gap recently promoted a new website, www.gapmyprice.com, which allows consumers to name their own price for a pair of men’s khakis. This approach really stands out as it brings a completely new strategy to the market in response to the changing market demands for cheap and “good deal” products. This seems to bring a brand new experience to online shopping for customers.
Gap’s solution in satisfying the consumer surplus of the market seems effective. Not only will it maximize the company’s profits, but it will also satisfy consumers into thinking they got a good deal. This new pricing strategy allows consumers to take the haggling experience online while they shop. This pricing strategy price discriminates as it tailors its prices to each individual. Therefore, it allows the company to maximize the amount a consumer will be willing to pay.
The only downside to this marketing strategy is the nature of the product. Pants in general are one of the hardest clothing items to buy without trying on. Thus, even with a successful promotion, this would result with a lot of product returns. Although a good idea, the success of this promotion seems unpredictable.