That depends entirely on the nature of the business.Quote:
Originally Posted by netrix
Simplistic example: it might work for Wal-Mart, but not for a single-operation bar in Pattaya
:occasion9:
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That depends entirely on the nature of the business.Quote:
Originally Posted by netrix
Simplistic example: it might work for Wal-Mart, but not for a single-operation bar in Pattaya
:occasion9:
please explain.Quote:
Originally Posted by scottish-guy
i agree with shared logistics, distribution, volume wholesale discounts, etc. high sales
at low prices is more profitable than a mom and pop store trying to compete at the same
prices.
but i don't care if we're talking about a lemonade stand. if you sell lemonade at $9 a
cup, and i move in across the street and start selling it at $3 a cup, then it's simple math.
all i need is 3 times more clients to make the same revenues as you.
but here's the deal. with more customers (and more HAPPY customers i might add) that
means more word of mouth free promotion. it also means that the same customers will
not only come back more often, but they'll spend more than they would otherwise.
even if the result is an initial loss-leader, the increase in publicity and repeat customers
would make up for it.
Quote:
Originally Posted by netrix
Well you've just answered your own question - every day you need 3 x as many customers as I do and you will increasingly need to be able to attract them on more than just price as no business keeps all it's customers on the basis of the original proposition - you have to increasingly offer more. If you attract them on the price alone, that becomes the expectation and a proportion won't come back just for that, they want something extra next time, which further reduces your profit!
Also, suppose it's not lemonade - which is popular and easy to sell, suppose it's a product that only a limited number of people want like.....rentboys? Is there sufficient demand for you to be able to attract 3x as many customers as me? :dontknow:
And there's one more factor which comes into play especially where booze is concerned - the lower the price you sell it at the more deadbeats and trouble-makers you attract, which drives away a proportion of other "decent" customers who would rather pay more and avoid e.g. drunken Russians throwing bottles around the bar every now and again.
All I'm saying is high turnover/low profit does not suit every business, many can prosper better using the reverse formula.
:occasion9:
[quote=scottish-guy]Quote:
Originally Posted by netrix
Well you've just answered your own question - every day you need 3 x as many customers as I do and you will increasingly need to be able to attract them on more than just price as no business keeps all it's customers on the basis of the original proposition - you have to increasingly offer more. If you attract them on the price alone, that becomes the expectation and a proportion won't come back just for that, they want something extra next time, which further reduces your profit!
Also, suppose it's not lemonade - which is popular and easy to sell, suppose it's a product that only a limited number of people want like.....rentboys? Is there sufficient demand for you to be able to attract 3x as many customers as me? :dontknow:
And there's one more factor which comes into play especially where booze is concerned - the lower the price you sell it at the more deadbeats and trouble-makers you attract, which drives away a proportion of other "decent" customers.
All I'm saying is high turnover/low profit does not suit every business, many can prosper better using the reverse formula.
:occasion9:[/quote:1979javc]
well thanks for clarifying but i disagree with every point you make.
there are crowds in some bars and not in others. the question is why.
figure that out and you'll get more customers more often spending more.
that's exponentially more revenue.
but i'm not advocating building a business model on price alone, i was
simply defending beach's comment from the naysayers. DJ is always
crowded and has low drink prices. that doesn't mean they're crowded
BECAUSE they have low drink prices, there are other reasons too, but
i'm sure it helps. customers there stay for hours and drink all night,
while customers at dream boys down the road nurse one drink all night.
[quote=scottish-guy][quote=netrix][quote="scottish-guy":1dzksmvo]
Simplistic example: it might work for Wal-Mart, but not for a single-operation bar in Pattaya
[/quote]
please explain....all i need is 3 times more clients to make the same revenues as you....[/quote]
Well you've just answered your own question - every day you need 3 x as many customers as I do and you will increasingly need to be able to attract them on more than just price as no business keeps all it's customers on the basis of the original proposition - you have to increasingly offer more. If you attract them on the price alone, that becomes the [b]expectation[/b] and a proportion won't come back just for that, they want something extra next time, which further reduces your profit!
Also, suppose it's not lemonade - which is popular and easy to sell, suppose it's a product that only a limited number of people want like.....rentboys? Is there sufficient demand for you to be able to attract 3x as many customers as me? :dontknow:
And there's one more factor which comes into play especially where booze is concerned - the lower the price you sell it at the more deadbeats and trouble-makers you attract, which drives away a proportion of other "decent" customers who would rather pay more and avoid e.g. drunken Russians throwing bottles around the bar every now and again.
All I'm saying is high turnover/low profit does not suit every business, many can prosper better using the reverse formula.
:occasion9:[/quote:1dzksmvo]
Scotish Guy got it dead on...The basic strategies are product differentiation or low cost.
[url="http://en.wikipedia.org/wiki/Porter_generic_strategies"]http://en.wikipedia.org/wiki/Porter_generic_strategies[/url]
Read the posted wiki link for an explanation of the differences between the basic business strategies.
Scottish Guy are you an economist?
:sign5:
Do I sound that boring?
Don't answer that!!
:sign5:
If you disagree that a sustainable business can be run on a low turnover/high profit model, then I'm sorry but you're just plain wrong. Where there is a niche market it is often the ONLY viable stategy.Quote:
Originally Posted by netrix
:dontknow:
What is also interesting, I think my gin/tonic has cost the same for the last 10 years, also in the other venues in the Soi.Quote:
Originally Posted by Beachlover
They are doing very well.
Yes the entry fee is 200 baht on weekends (incl. 2 drinks) and 100 baht in week nights (incl. 1 drink).
DJ Station is not for everyone, but I like it very much, even if I think it can be to crowded in the weekends.
BTW I find the drinks on the dancefloor to be much weaker, than on the other two floors.
Totally agree with you.David is doing all that can be done.I will be staying there next week.Quote:
Originally Posted by kquill
Interesting. I buy drinks from all 4 bars and haven't noticed this. How noticeable is the difference and was it just once or twice or have you noticed it consistently?Quote:
Originally Posted by gaymandenmark