BOGO offers and coupons

[Sarah0633]

Is anyone here in marketing? Can someone please explain to me these "buy one get one" offers that I keep getting (especially now with the economy). If they were to give me 50% off one thing, I would definitely go and buy something but for most offers I get I only want one. I've always wished there was a Happenings equivalent for single people. Is it that they figure if they can get two people to come into their restaurant/store you will figure you're saving money so you'll spend more? Anyone know the strategy behind this?

[Ogee Oglethorpe]

I love Dennis Miller's quote on this issue, from one of his stand-up acts a while back. I believe he was talking about KMart;

"Let me tell you something folks; two of sh!t is still sh!t. If they really want to f'k you they'll give you three"

Sorry, felt the need to share that.

For the most part, yes, it gets you in the door with money in your hand where you're more likely to spend even more money on other products. They've got bar charts and pie graphs to illustrate this very fact, no doubt.

[Costa Rican Gopher]

If it's a restaurant they almost always offer 50% off on a slow day or 2-1 on a slow day. It's likely on food only as their margin is less than 20% anyhow but while you're there you'll be feeling rich from that savings and instead buy some cocktails or wine where the margin is through the roof. Anyone who's ever worked in retaurants knows all the money is made on the drinks and the food is just barely a break even affair.

As for buying a tangible product at say Best Buy it's simple. They're still earning on the 50% savings albeit slight so they want to do big volume to offset their smaller profit margin. Just find a friend and go 50/50.

Here in Costa Rica there are people who split a PriceSmart membership (Sam's Club). They'll buy the 20lb bag of rice and slit it up 20 times then re-sell in their poor neighborhoods a a profit. They do the same with boxes of 24 cartons of milk, beans, diapers, etc. It's all about volume.