Getting the price right

Juggling the need to clear inventory while watching the bottom line can make discounting a tricky proposition. In the US, this phenomenon has reached the point where a number of large retailers will increase retail prices above what they intend to eventually sell their products for so as to create a buffer for sales events such as Black Friday.

We spoke to Wing Chan, commercial director of Samsonite Singapore, to find out how the premium luggage brand manages its pricing and discounting strategies in Singapore.

Chan is a part of the speaker panel at Marketing magazine’s annual Shopper Marketing conference, on 25-26 June in Singapore. Click here to find out more.

Marketing: How price-sensitive is the Samsonite customer?

Chan: Our customers, especially business and leisure travellers, are looking for a premium brand and do not mind paying the best value for it. They’re conscious about style and quality, and they need merchandise that’s reliable and fully executes on what it promises.

Marketing: What is Samsonite’s take when it comes to product discounting?

Chan: Our core products are not discounted at all. Samsonite participates in price discounts during sale periods for the benefit of acquiring new customers who may be price-sensitive or for existing clientele who want another Samsonite to add to their collection. We participate in the Great Singapore Sale (GSS). However, our core merchandise does not go on sale during this period. In addition to the regular end-of-season sales where past season merchandise is cleared at a special discount – mainly during the GSS – Samsonite also brings in a special holiday assortment to supplement this. During the sale season, about 30% of our store merchandise are sale items. In addition, we also do a tactical programme known as a trade-in, where we allow customers to bring any old luggage in any condition to our stores and buy hard-case luggage at a special discounted price. This happens yearly and the luggage that is being offered will revert to its original retail price after the trade-in campaign.

Marketing: What do you do to ensure price consistency across all your stores?

Chan: Our stores, department stores and retailers all share the same pricing policy across Singapore. Any discounts made or offered are controlled by Samsonite. Discounts are offered on selected ranges and this could be for the following three reasons: (1) a discount may be given on a past season colour that we are phasing out; (2) a discount may be given on products that we are clearing to make way for a newer range; or (3) a discount is given during a tactical promotion where we reward customers with a gift with their purchase or a purchase at a special price following a regular purchase.

Marketing: When are the most effective periods to offer discounts?

Chan: Given the competitiveness of the market, Samsonite offers promotional prices during the GSS and year-end sales where customers may be looking for value-for-money products for gifting purposes or to prepare for their travels in the following year.

For more depth on Samsonite’s pricing and retail strategy, delegates can attend Shopper Marketing 2014, as well as listen to many other key brands’ strategies. Those interested in attending the event may contact Joven Barcenas at jovenb@marketing-interactive.com or call +65 6423 0329.

For sponsorship opportunities, contact Che Winstrom at chew@marketing-interactive.com or call +65 6423 0329.

To discuss the agenda, enquire about presenting or to suggest topics, contact Ambrish Bandalkul at ambrishb@marketing-interactive.com or +65 6423 0329