When pricing doesn’t add up
Confession time: I’m not a math whiz. Truth be told, I just figured out how to balance my checkbook.
Still, I couldn’t help but notice something cockeyed at WinCo tonight. That’s when I discovered a 48-ounce container of cottage cheese selling for $6.87.
That wouldn’t be a big deal, except the 24-ounce container on the shelf just above it was $2.78. Meaning purchasing two smaller containers was $1.31 less than buying one large container.
This wasn’t an intentional marketing strategy, either. There was no buy one, get one promotional effort announced on the shelf.
It was just screwy pricing.
What threw me off is knowing how packaging impacts pricing. After all, if you have two packages, there’s more printing, plastic, packing cartons and labor to stock the shelves. There are also more skids of product taking up more room in the truck, increasing shipping costs and…well, you get the idea.
Logically, given that the contents of both small and large packages were the same, the larger package should have cost less than two smaller packages. And it didn’t.
Product and service pricing are typically impacted by competition, overhead, supplier costs and manufacturer promotions. Meaning it’s entirely possible the manufacturer had too many smaller containers and priced them cheaper to get rid of them faster.
There’s also the possibility that someone couldn’t add properly, though with grocery stores typically having very thin margins, I’d find that hard to believe.
Or maybe whoever set the retail price was counting on customers opting for the convenience of the large package without checking the math.
That’s where I’m putting my bet. But is that convenience worth paying a 23.5% premium for?
Regardless of what you sell, you can benefit from these marketing lessons:
Customers do pay attention to your pricing strategies
If you’re doing something wonky, you can probably promote it as a benefit
Because WinCo could have touted the two for less strategy or the convenience factor (though probably not both) and gotten some customer goodwill from the effort.
Instead, they just put it out there and hoped for the best. But the way I see it, if you’ve already got your merchandise, pricing and customers in place, why not get a little extra mileage by telling folks you did it for them?
With that said, I wish you a week of profitable marketing.
5 Minutes to Better Branding. https://tinyurl.com/hatbrand.