I bought a Viking Refrigerator earlier today at a local Appliance store called Albert Lee appliance. This is a family owned store that has been in this business for the past 3 generations. I made this purchase here as this store was referred to me by my home builder. I personally do not have any experience buying an appliance worth around $10000 by myself. Hence I took the suggestion of my home builder and also because they offered to install it for free if I purchased it here.
Pricing & Purchase Location:
In terms of pricing tactics, I noticed a couple of strategies used by the sales person at Albert Lee Appliances. Price decoys is one of them. I noticed that the sales person used the full retail price on certain products and offered to give me a discount on other ones making them more attractive. Also, Differentiation was another pricing tactic that was used by the sales person. Once he understood that I valued certain appliance brand names more than the rest, the discussion took a pivot and he tried to convince me on how some brands are considered “high end” as opposed to the others. Ideally I would have preferred to get more rebates on my purchase; but ended up paying the posted retail price.
Also, I would have preferred to purchase my appliance on certain retail stores like Costco or Amazon as opposed to a retailer that I was not aware of. But in this case, I was not given the option to choose my retailer, as I had to go with what my builder recommended as they had a service tie up.
In conclusion, I think in pricing and distribution are key elements that certain businesses can use as a leverage if they have the right partnerships. In this case, because Albert Lee has a partnership with Redfin realtors, I had to purchase my appliance from Albert Lee as opposed to other popular retailers. Same goes for pricing; in this case, I was not able to walk away from the appliance store, as I had to somehow purchase it from this store inorder to have my builders install them for free.