SOME THOUGHTS ON ADVERTISING.

Let's assume that I am in need of a new computer.

I see a large advertisement in a national daily, newspaper, inserted by "The U.K's biggest High Street Computer Specialist." I cannot, however, recall having noticed them in any of the three High Streets which I visit occasionally.

I am given no address or list of retail outlets, only an "0870" telephone number to contact. I suspect that this is because the telephone is a means of obtaining from people more information than they intend to give - once they have got past the "hold" music and someone named Tania whose technical knowledge is skimpy. They have rehearsed their ‘line’ to potential customers – you haven’t.

Advertised is a computer, the given specification of which would, perhaps, meet my requirements

Its price is given as "only" £1099. (In my book, "only" applies only to items under £1) The generous offer to accept a pound short of £1100 is because the trader thinks that there are some mugs who will cheerfully fork out £1099, but would hesitate over the extra quid. There must be some, otherwise they wouldn’t do it. (The excuse for pricing an article at, say, £2.99 so that the shop assistant has to open the till to give you change and so cannot pocket the level amount him/herself, obviously does not apply in this case.)

No indication is given as to whether this includes VAT, carriage and setting-up. It is offered as a package with a "Free" printer and scanner.

We all know that the first rule of economics is that "there is no such thing as a free lunch" One may assume therefore that these "free" peripherals are offered, a. because they are obsolescent models, or b. because they are cheap and nasty and not selling well. Applying the first rule of economics, we can assume that the potential selling price of these peripherals is included in the £1099 . The buyer is being asked to pay to clear shelves of otherwise unsaleable goods.

I do not need these "freebies", having two printers and a scanner already. The advertisers illustrate separately a printer and a scanner, the illustrations curiously similar to the "freebies", at £19.99 and £24.99 respectively. (That’s forty five quid as near as dammit!)

Right, so let us deduct these items at their "face" value from the £1099. This leaves £1055.02

But this, we may assume, includes VAT. So let's get down to the basic retail price which, if the VAT at 17.5% is deducted from the last figure, leaves £898. This is a basic retail price - what the mark-up is we do not know. Let’s be kind and assume that this is 50% - it’s probably more - but then, wages have to be paid and advertising at national level is not cheap. etc. etc.

We are told, next, that the customer need not pay anything for nine months. In other words, I am being offered a nine-month loan of £898. But I do not need to take out a loan.

Interest-free loans are notoriously scarce, so we can assume that the APR rate of 29.9% - the quoted rate demanded by them for a loan extension beyond this period, has already been applied and is included in the £898. For a period of nine months, this interest amounts to £155. So let us deduct it, leaving a figure of £743.

Now, to be fair, we must add VAT on this amount, which is £130.

So we arrive at a final figure of £873, this saving £226 on the original £1099.

A good deal of beer can still be bought for £226 !

There is a faint possibility that the advertisers could be persuaded to accept from me an offer to place into their ‘hot and stickies’ a bankers' draft for £873 at the very moment that the computer - less printer and scanner - had been delivered , set up and proved to be working satisfactorily. I buy my cars on that basis, and "what's sauce for the goose…... I do not, however, intend to try this as I would probably be dismissed as a 'clever dick' and be ignored, sales pressurised, or sold a 'pup' that would break down two days after any guarantee expired or the firm went bankrupt. After all, when there are so many mugs about, why should they bother ?

“And the moral of this story, chldren………………………………

WJG. 13.11.02