Loss Leader?
With Halloween upon us, we recently went to a pumpkin patch as a part of having some seasonal fun. The weather was pretty decent, so it was a good day to go out there and enjoy the experience. It’s fun for kids, fun for doting parents, and it’s generally inexpensive. What a deal, right?
Now, up front I’ll say that it was a lot of fun going – and I don’t have regrets. I got some great pictures in, and made some memories along the way. It’s priceless seeing a kid enjoy taking part in fun fall traditions, and carrying out a pumpkin!
Good times, indeed. Worth every penny for the reasons I mentioned above. This in spite of being expensive, due to being taken in by the creative use of a loss leader by the pumpkin patch!
A loss leader is of course a product that’s sold at a low price, in order to entice the purchaser to buy additional, more profitable products. I always think of the razor blade model as an example – razors are sold for a low price, but the replacement blades are pricey. Perhaps a better example might be the super cheap, $0.01 two-pocket folders I bought during back to school sales. These incredibly low prices probably didn’t offer a profit margin for the store, but it got people in there to buy other, more expensive items while already there. Supermarkets doing this quite frequently as well. We’ve all seen this in play.
At this pumpkin patch, the pumpkins are all up front near the entrance gate. It’s actually at a farm, which has a ton of space. Anyway, the place is known to have low prices on pumpkins, relative to the local area. It probably draws others in that way too – we picked up 2 decent sized pumpkins for about $3.50. Not a bad price.
Of course, there was a catch!
As you looked past the pumpkin area, ahead of you was what amounted to a big autumn carnival. They had all kinds of rides for little kids, animals to pet, and other seasonal activities. They had fresh corn on the cob, as well as a makeshift dining area where you could buy lunch. Additionally, they had a kind of country store in a big barn, with apple cider for sale and a ton of gifts, candies, and things of the like. This was much more than a simple pumpkin patch, in reality.
The prices for these other activities were not low. A kid’s ride? $2.00 to $3.00. A bottle of water? $1.75. How about this: want to feed some parakeets (yes, they actually had this): $1.00 – I think. Might have been $2.00. You get the idea.
Bottom line is, we spent over $25 extra, beyond the cost of the pumpkins. We were lured in. It’s way easier said than done to say no to excited kids during that time, and I wanted to give them a good time anyway. It was worth it.
It was also a good reminder of how a loss leader can be used to draw you in to spend more than you originally expected to.
My Questions for You
Have you ever fallen for any loss leader pricing strategies?
What strategies do you have for either avoiding or taking advantage of such enticements?
Do you have any examples to share of loss leaders that you’ve encountered?
We have one of these carnival + pumpkin patch too. We don’t buy pumpkins, but we went to the bowling alley right next to this carnival place. I didn’t see anyone just buying a pumpkin and getting out, everyone went straight for the carnival.
I don’t follow sales too much, I buy what I want when I want, so I might miss some loss leaders, but hopefully I am missing out the extra stuff that comes with the loss leaders too. Only time I take note of them are around thanksgiving. I stock up on toiletries for the year around that time. Those are great loss leaders, toothpaste, shampoo. But the annoying thing is a lot of times only the shampoo will be on sale for pennies, the conditioner will cost $5. It takes some patience to buy just the shampoo and wait for the conditioner to go on sale.
Suba – I think what you’re alluding to here is important: discipline. It’s important to buy the true bargains without getting tempted to buy the other stuff. In the case of the pumpkin patch…well, the other stuff was a part of the experience and I chose to entertain kids. But at a retail store….yes, I agree that it takes patience as it’s good to be disciplined about it.
I actually think inkjet printers are loss leaders. You buy the cheap printer, but they have you on the ink!
Corn mazes are very popular here, and you can indeed drop a ton of money there. However, Halloween is only once a year, so enjoy!
Kris – I agree on printers fitting the loss leader model. Printers and razors are the first two things that usually come to mind for me, when thinking of this strategy. Yes, I do agree by the way on taking the time to enjoy the season with kids 🙂
I plan on visiting our local pumpkin patch this weekend and see if I can get some of those wheat straw bales at a discount. Sometimes they’ll be anxious to unload the closer we get to Halloween.
We’re not doing Halloween this year, for the first time. The boys are old enough to not care very much, and an outing to Incredible Pizza sounds like a better option. Even with spending some game money, we’ll come out ahead.
101C – It’s funny how places want to unload seasonal items as they get right upon the end of the season. I actually saw an ad for a place that offered free pumpkins for the first 50 or so kids to come in on an upcoming day (this weekend, I believe).
I think Wal-mart and target are both big “loss leaders” – you need something that you know will be cheaper there, like cleaning products maybe, but there is so much other stuff on display as you walk in… I seem to have an issue spending more than I expect to every time I go to target.
Kellen – yes, I know what you mean. The loss leaders entice us to buy other things that aren’t quite the same bargain. It’s a challenge, I know.
Interesting. I never really thought of loss leaders before. Now that I think of it though they are everywhere and you can get swayed if you are not careful. I find the end isles at supermarkets like this. If you aren’t careful you can buy way more than you need.
We don’t have a pumpkin patch here but we do have some corn mazes which are really popular. Once we have kids I am sure we are going to go and try them out.
Miss T – they’re seemingly everywhere, and they work because many people don’t think of them! All that’s noticeable is the deal itself.
The loss leader is a great marketing strategy and pretty much a science these days. Walmart practically came out and admitted selling products for break even or a slight loss in order to draw attention to higher margin products. Combine that with where those products are placed in the store and traffic flow through aisles. It’s a surprise how anyone can get out of a store with only what they came for.
Novel Investor – I agree, pricing is a science. Careers are made in this particular field, no question about it. It’s almost hard to avoid succumbing to some of this in one form or another, but as a consumer it’s good to be aware so that sometimes you can make a strategic decision of your own
Are you kidding me? Especiallly at these festivals, you can hardly walk in without dropping a few extra clams!! And the price of food is through the roof. But my motto is, yoy are making memories!!
Barb – yes, it was a great way to make memories!