Question

Topic: Advertising/PR

New Location Promotion / Pricing Strategy.

Posted by Anonymous on 11/9/2009 at 10:12 PM ET 250 Points
We are moving our sports training / camp business to a bigger locations just two blocks away. We have been in in business for 18 years and there is slot of local competition. We are renovating and old factory and will have very low rent compared to our competition. We can lower our prices quite a bit and still be more profitable then others in the area. Is this a good strategy? We feel this would be a great chance to take air of market share and potentially hurt our competitors. Amy adive would e appreciated. Also suggestions to promote our new location would be great. Thanks in advance.

Jim
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RESPONSES

  • Posted by Jay Hamilton-Roth on 11/10/2009 at 8:27 AM Accepted
    If you have been in business 18 years, why would you suddenly want to cut prices? Would you be offering less or simply passing along the cheaper rent? Instead of reducing the cost, why not add value? For example, 2nd person in family that signs up is 50% off (or more). Or, sign up your friends for 25% off.
  • Posted by Peter (henna gaijin) on 11/10/2009 at 10:38 AM Accepted
    I agree - when I first heard that you are moving to a new location and are looking tor educe costs, that surprised me some. Instead, I would use the extra margin you free up from the lower rent to try to increase services somehow, giving people more for their money (and also hopefully attracting more customers).
  • Posted on 11/11/2009 at 1:37 PM Author
    Thank for the comments. We are
    getting a bigger space and like the idea of discounting in the way of sign up for one get 2nd one 1/2 price. Any other suggestions would be welcomed. Thanks again.
  • Posted by CarolBlaha on 11/12/2009 at 7:16 PM Accepted
    I agree with the above posters. Leave the price alone but focus on giving them more for the money than your competitors.

    Granted you have to be competitive. What is your facilities niche. To train on what level?

    People don't go to training camps for price. They go to win. Or to meet a goal. I'm thinking of the times I have hired a trainer-- for a marathon, or when I first started weight training. Price wasnt' the issue. I just wanted someone with the knowledge who'll train me the right way so I don't injure myself. I had internal goals.

    Sometimes reducing pricing has an opposite effect. This is not like selling a commodity. You want to get a good price, a good margin- -but don't sell youself short!
  • Posted by matthewmnex on 11/12/2009 at 8:01 PM Accepted
    Your bigger venue gives you more scope to make your store not just a store but a 'destination' for sports enthusiasts.

    Keep some space open for clubs to hold their meetings in your venue; ie. the cycling club need a rallying point to start their day's ride or meet to discuss their next event.

    One sports store in my area had a great promotion, they created a basket ball shoot out zone with a real shot clock and buzzer score board etc.

    For every purchase over X amount, the kids could try their hand at shooting, how many points can they hit from the free throw line in 1 minute.

    At the end of every week, a prize was awarded for the wimmer. Of course there was always a leader board on the wall so people could see each week who was leading.

    They created a rock climbing wall also, if you have the space, and it sounds like you do, then focus on creating a sports, theme venue not just a retail shop. Show your buyers that you are creating a community and safe haven for sports enthusiasts to meet and commune.

    Don't spend your extra budget on price decreases, spend it on building value and maybe do a little sponsorship for local teams to build loyalty if you can.

    Don't forget the adults. I am guessing that the majority of your buyers are young people but the majority of the 'Payors' ate the parents.

    So please both the buyers and the payors :))

    Good luck,

    Matthew
  • Posted on 11/19/2009 at 3:16 PM Author
    Hi

    Thanks for the input. We are small compared to the size faciltiy our competitors have. They get a lot of revenue from renting out their space to teams. With our new facility we can now rent space as well. Their rent is 10x what our rent is and that was the reason I thought of cutting the prices for rentals so cheap. We can still be profitable and really put a huge dent in our competitors business. But I like your thoughts. We may go with full price rental and 1/2 price for the 2nd rental. This is an opportunity to really take away a big piece of our competitors market and could make it tough for them to stay in business if we can take away some of their team rentals. We are a sports facility specializing in baseball an softball training.

    Any other thoughts would be welcomed.

    Thanks!
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