We’ll Match ANY Advertised Price

Price is probably the most poorly understood element of the traditional marketing mix – but the "match any price" campaigns that have been run by Dan Murphy's Liquor and Bunnings Warehouse, to name just two, shows that these guys understand it. Bunnings, and I believe their close relative Officeworks, used to offer to beat any advertised price by 5-10%. This is no longer the case – these guys compete by offering the same price.
It's not a very nice thing to do. As these companies tend to be the biggest in their respective fields, they are essentially blocking the opposition from making any short term gains or impact by have price promotions. It is quite a cunning plan – let the little guys try to undercut you on price, watch them spend a huge bucket of money on advertising and spreading the word – then cash in by offering the same price. It appears to be the business place equivalent of pushing in front of cutting in front of a bus cutting in front of a long line of traffic. It's a whole new level of exploiting economies of scale and it is extremely effective.
Why do customers go for this?
It seems a little strange doesn't it? Someone sees a catalogue in their letterbox, sees an extremely cheap price for something they like and think "Wow! I'm going to take this to a shop that charges a higher price! They can have my money, not the guy who has taken the time to actually give me such a nice offer". And here's the little psychological twist: people get a lot of satisfaction out of discovering a deal. They get even more satisfaction from presenting this deal to people. When that deal is presented to a company that should be big enough to offer such a great deal then the pleasure payoff is massive.
There is also the fact that the larger retailers have a much broader product range. So whilst you can get this special deal you can also breeze through the shelves and know that anything else that takes your fancy will also be available. This is an undeniable appeal but I don't believe it is the driving force of this little marketing game.
I've often said that if you get stuck competing on price it means that you're not different enough. The interesting thing about this price matching strategy is that the large retailers aren't actually competing on price – they are eliminating price from the competitive landscape. An elegant, effective move.
It all comes a little unstuck
The dreaded asterisk has suddenly come into play! On account of being a national retailer, Dan Murphy's Liquor has come into a little bit of strife. The prices they charge in country towns are higher due to the freight costs involved in getting the products on the country shelves. All of a sudden "any advertised price" can cut into their profits. The conditions, which appear on their website, include: "Competitors' premises must be within 10km of our store". There's a lesson there in being very careful about what you promise.


What do you do if you are a little guy?
It's a tough world, and when big companies are more interested in destroying your profitability than buying you out then you need to avoid the practice of competing on price alone. Sure offer a special price deal – but make it on privately branded product, or in conjunction with an event "half priced wine for attendees to our special wine tasting event". And most of all – make sure your service is better than the big boys – it's all too common for the big retail brands to get fat and lazy when their scope widens and they forget to smile at those that hand over the cash.