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"I think that there were some over-arching benefits to the industry from our marketing efforts."
—Joe Pagano, Best Buy VP Merchandising

BEST BUY FIGHTS BACK

Retailer Claims $9.99 Price Point for Limp Bizkit Doesn’t Signify Price War

A "Rerap" exclusive by Mark Pearson

When is a price war not a price war? When it leads to increased sales of toaster ovens? Or when it spurs sales at competing retailers? Hey, who do we look like, Alan Greenspan?

Best Buy VP Merchandising Joe Pagano told HITS magazine exclusively he disagrees with the characterization that the $9.99 price point on the new Limp Bizkit is the first shot in a price war.

"We consider the marketing equation much more complex than just price. This is one of many levers that are available to be pulled in marketing our products to the consumer."

Pagano insists that Best Buy was looking for the right act and the right price to launch the holiday season and the new four-page wrap-around insert in their Sunday circular that hits some 50 million homes. Contending that selling a particular title for under wholesale should be considered as money spent towards an overall marketing plan, Pagano argues that overall sales have to be taken into account. To that end, Best Buy has been increasing the amount of catalog titles in stock and, according to Pagano, the effect of yesterday's increased traffic was profound.

With the aggressive price point, it came as no surprise that Best Buy literally tripled the competition's first-day numbers on Limp Bizkit. Obviously, the Bizkit's catalog saw a substantial spike as well, but it went beyond that, according to Pagano. "Overall catalog sales surged by over 30% from the previous week. This was our largest day in music and movies of the year."

Pagano declined to comment on whether or not Best Buy had plans to put a $9.99 price tag on any other upcoming titles, but remains adamant that this is not the beginning of a price war. "Not everyone that bought Limp Bizkit or 'Toy Story 2' (also priced by Best Buy below wholesale) bought it at Best Buy. I think that there were some over-arching benefits to the industry from our marketing efforts."

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