GameStop's Pricing Strategy: Customer Attraction Tactics

As a consumer think of a place you like to shop at because of the so-called great bargains, coupons, cash back and or discounts they offer. Commonly known as GameStop, Game Stop Corp is an American company that deals in video games, tablets, phones etc. With over 7, 117 retailer shops spread out throughout the US, Game Stop has established its headquarters in Grapevine, Texas. Research conducted on companies like Game Stop and JC Penney proves that customers enjoy and love it when their suppliers give them frequent discounts on their purchases.

This makes them feel appreciated and hence keeps them coming for more

The large customer base and success that Game Stop has experienced is a result of the pricing strategy that the company has used for quite a while. In maintaining its customers, Game Stop uses two major strategies which are inclusive of; The trade back deal where customers can sell old video games to the company. This sale caters for up to 20% of the amount needed to purchase a new video from Game Stop.

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The sale of preowned games- customers get to enjoy the opportunity of buying pre-owned games from Game Stop. This is an offer that one can rarely find in other game shops in the US. The above-mentioned techniques are some of the reason why Game Stop shops are always flowing with customers. The trick used here is keeping customers happy to maintain good sales rates. From your shopping experience explain if the discounts you received on your purchase you feel was a bargain deal or do you feel you overpaid.

Harsh economic times can be the cause of people depriving themselves of any kind of leisure. In the 21st century, the USA has experienced hard economic times a fact that has led many people to avoid luxury because they cannot afford it (Dewar, 2018). For example, PlayStation 4 costs about $400 to $500 when first introduced into the market. The thought of spending such a huge amount of money on a game just so that children can play, gets one thinking of how tough the economy has been on them.

However, as soon as discounts on these games come in, people rush to purchase them. When buying games from Game Stop, I tend to wait till the prices go down to $300 or $ 250. I feel that this discount is a good bargain deal for me since it helps me spend less, therefore, leaves me with money to spend on other pressing bills.

Did you believe the retailer is sacrificing revenue for you the consumers’ benefit? Why or Why not? I believe that Game Stop does not sacrifice revenue for my own benefit as a consumer. This is because, when the retailer offers discounts on games after a short while of having them in the market, it stands to gain the following;

A good number of people have bought the games and used them for a while. This means that a neighbor can go play at his friend’s place instead of spending a lot on buying something that they can already access. When the retailer offers discounts on such games, people feel motivated to purchase their own games instead of borrowing from their friends since they know that they will get the same games at cheaper prices. Through this, the company motivates its customers to keep coming back to the shop. A continuous flow of customers leads to the making of profits on a daily basis therefore by end month, Game Stop does not lose out on anything.

A retailer suffers when it has products on the shelves, products that no one is buying (Lin, Liang, Teh, 2015). Giving discounts may lead to a little loss at first, but then with time, all the products sell therefore no loss is incurred in the long run. Giving discounts helps the retailer gain more, it does not benefit customers only.

Do you find their sales practices to be ethical and beneficial to the consumer or perhaps unethical and misleading? Game Stop is one of the few shops that try to uphold ethical principles when dealing with customers. Each time Game Stop offers discounts to its customers, the customers are fully are of what they are getting into. For example, the trade back strategy helps customers spend less in buying new games that they want while at the same time they get to dispose games that they no longer use. This is a deal that works in their best interest, they do not lose out on anything.

References

• Lin, Y. F., Liang, T. P., Teh, P. L., & Lai, C. Y. (2015). Can Time Pressure and Discount Strategy of Mobile Coupons Affect Consumers' Purchase Intention. In PACIS (p. 62).
• Dewar, G. (2018). Advertising Bias in Video Game Magazines.
• Swenson, G. (2015). U.S. Patent Application No. 14/099,135.