Brand Mix

When's the best time of year to buy a lawn mower? I bet most of you will guess somewhere close to the right date. Which is October. When's the best time to buy exercise equipment? Shouldn't it be March or April after everyone has given up on their New Year's Resolutions? Apparently not. You actually get the best prices for exercise equipment in January, exactly when people are most enthusiastic about getting back into shape.

My new, best source of information, USA Weekend, right after its "Whatever happened to..." section, lists out the best times to get a deal on a bunch of categories. Cars: August and September as dealers clear their inventories. Gas Grills: September though December, post season. Camcorders: November. It doesn't say why but I assume it's because demand is high heading into the holiday season. Meanwhile, the magazine is full of Back to School articles and special offer ads (curiously all featuring underwear) suggesting that the best time to shop for school supplies is right now, some weeks before school starts.

It's my impression that, over the years, the use of price discounting for non-staple products has been shifting from supply management to demand generation. It used to be more about clearing inventories, post season. Now it's more about getting a bigger share of sales, especially in the peak season. Manufacturers and distributors are better at managing inventories than they used to be so they don't need to use clearance sales so much. But competition is as fierce as ever so discounting in the peaks season is often a necessity.

In product categories where the season is short and the competition intense, the battles for market share can be brutal and, sometimes, quite absurd. Back in my Nestlé days, the annual bloodbath played out between Nestlé Hot Cocoa Mix and Swiss Miss, its hated rival, was quite something to watch. The goal of both contestants was to get out there before the other one and ship boat loads of hot cocoa to retailers and lock up the shelf space for the season. Each year the shipments got earlier and earlier and the deals to get the increasingly reluctant retailers to sign up got higher and higher. Neither side ever delivered the knock-out punch and, as far as I know, the war continues.

From a brand perspective, all forms of price discounting run some risk of brand dilution. Clearance sale tags suggest failure--sad remnants of products that no one wanted. Price discounts mid season suggest that your brand's price premiums are just too high. Perhaps the worst of all is when you start seeing clearance sales for products that are still in season as retailers start getting ready for the next season which isn't even here yet. Fashion retailers seem to specialize in that particular game.

It's tough though. You can't afford to take your eye off the competition or they'll get a jump on you. But if all you do is follow them, you may end up falling off the cliff right behind them. Of course, it'd be great to have products so unique and differentiated that you are completely removed from these messy considerations. But, typically, the best your brand will give you is a little protection and some less unattractive options.

Photo: Is there a sale on? by timparkinson on Flickr