War on wallets now heats up

When a snow cone like the one at right calls your name some hot day this summer, you'll probably mine the pockets of your shorts for whatever the vendor's charging for it.

Yes, the thing cost just pennies to make. No matter. Spending that $1.50 or so answers a passing "want," and cools you down.

If you're like most Americans, you save the big internal debate over what constitutes an acceptable profit margin for trips to the auto dealership, the record store, or a big furniture outlet.

Businesses continually test our tolerance for price markups. Competition helps keep them from getting too greedy. Nothing new under the sun, really.

So what makes markups worth reading about now?

Summer brings its own standard set of consumer demands – for fleeting, low-grade goods (flip-flops, cheap sunglasses) that people need to buy on the fly.

Purveyors of such items net most of their yearly revenue with summer sales, a fact that dovetails nicely with the elevated tolerance for frivolous spending that attends the vacation months.

Of course, sales of more durable goods (think air conditioners and snowblowers) can be seasonal too. And plenty of other products are subject to pricing patterns tied to cycles – the dawning of a new model year, for example.

To what degree do retailers try to tap into the free-spending season? And will they redouble their efforts to pad profits this summer, in which more day-tripping vacationers might have travel money left over to spend on themselves?

As consumer writer Noel Paul explains, marketers adapt their tactics to the economic times, and they can smell a selling season.

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