Watching sunset behind me as i drive home across the san mateo bridge, i kept thinking [...]]]> Heard an ad from Sleep Train on the radio today, announcing that they’d match any competitors’ published price for 90 days. at the outset, it sounded like price war problem in a race to lower and lower margins.

Watching sunset behind me as i drive home across the san mateo bridge, i kept thinking how they could be doing this and still be expanding their business. turns out it’s anything but race to the bottom. here’s how -

lets say Sleep Train offers price match guarantee. lets say their competitor, Mattress Discounters, did respond with a lower advertised price to customers of Sleep Train. If a customer actually did use this incentive, Sleep Train would rather refund the difference than to accept a product return - after all, the sale has already been made, and the cost of acquiring the customer is probably much higher than the price difference.

So Mattress Discounters doesn’t gain any new customers, but only managed to hurt the bottomline of Sleep Train. But wait.

The advertised lower price now applies to 100% of Mattress Discounters’ customers, not just those that are comparing them with Sleep Train!

So Sleep Train can safely offer this Price Match guarantee with impunity, with no real monetary value delivered to the customer. 

యజ్ఞహ ఇజ్యో మహేజ్యశ్చ క్రతుస్సత్రం సతాంగతిహి| సర్వదర్సీ విముక్తాత్మా సర్వజ్ఞో గ్ననముత్తమమ్||

yagnaha ijyo mahejyascha krutussatram satangatihi sarvadarsee vimuktaatma sarvagno gnanamuttamam

what is the meaning of the above?

(some portions of the above are in Telugu language, courtesy nivedita)