Path: utzoo!attcan!utgpu!jarvis.csri.toronto.edu!cs.utexas.edu!tut.cis.ohio-state.edu!ucbvax!hplabs!hpda!hpcupt1!swh
From: swh@hpcupt1.HP.COM (Steve Harrold)
Newsgroups: comp.sys.ibm.pc
Subject: Re: DAK sets itself up for massive losses
Message-ID: <-286529969@hpcupt1.HP.COM>
Date: 30 Nov 89 15:52:42 GMT
References: <10790@thorin.cs.unc.edu>
Organization: Hewlett Packard, Cupertino
Lines: 28

Re: DAK's "losses"

This marketing ploy reminds me of one when I was a kid.

A ball point pen manufacturer was touting how large the ink reservoir was
in his product.  In fact, it was so big that "if you ever run out of ink,
we'll replace the empty with a new refill free of charge!".

This sure sounds like you're set for for life, doesn't it?  BUT, if you
think for a moment, how many claims will actually be made?  Most people lose
their ballpoint pens before they run out!  And of those who see it to the
bitter (dry) end, how many will remember the promise made at the time of
purchase?  And, for the amount of money at risk, who would actually spend
the postage to redeem the free refill?

All in all, a good marketing ploy, with very little after sale cost to the
vendor!!!

The DAK case is similar to many stores who "guarantee that we have the 
lowest price anywhere!".  Of course, someone diligent enough can usually find
a lower price, and when he makes his claim, the store will indeed refund the
excess price to him.  BUT the store continues to sell at THEIR original
price; they do not adjust downward.  So they may lose a few dollars for the
VERY FEW who take up their offer, but look at how many extra sales they did
make because of the "guarantee", sales they would have otherwise lost.

I expect DAK will make good to some VERY FEW people who take up their offer,
but I expect they will make a net gain.