Is the price right?

25 01 2011

With the VAT increase, increased fuel costs and even the cost of wheat going up, consumers are no doubt noticing their weekly supermarket bills are going up. Which of course creates a bit of a problem when it comes to the marketing tactics of the supermarkets, of course there are the deals and offers all aiming to grab attention and win sales.

However, I’m noticing some pricing “adjustments” that – whilst technically fine, still seem to fly against the messages of trying to help customers save money.

Allow me give you an example, for most of last year both Tesco and ASDA were selling bottles of their own-brand bleach on a promotion of 2 bottles for £1 – what a bargain!

Then towards the end of last year Tesco nudged the price up to £1.10 for 2 bottles, whilst ASDA kept their offer at 2 for £1 – top marks to ASDA. Now in battle of the bleaches ASDA have taken their own-brand bleach off promotion and are currently selling it at 68p per bottle.

If you do the maths that means 2 bottles at ASDA now cost £1.36 – a whopping 26p more than Tesco.

Now the problem I have with this from a marketing perspective is that ASDA have added their “Rollback” POS to this product because the single bottle is now 68p compared to the previous single bottle price of 70p. Well considering that for at least a year this product was on the 2 for £1 promotion, I really can’t imagine many customers only buying one bottle for 70p – it’s a no brainer. So yes technically the product is now 2p cheaper per single bottle, but really come on ASDA you can’t for a second think your regular customers will genuinely think you’re offering them a saving on this product.

This is where I’d offer a word of caution to all retailers – your customers are becoming increasingly price sensitive and they will notice these “tweaked” prices, and whist you can make these “adjustments” you would be well advised to show more respect to your customers and ensure that your offers are genuine.

Oh and in terms of appropriate and effective POS, Tesco are promoting their own-brand bleach with a simple message “Bestseller” – a good way to attract the attention of the big brand bleach buyer and offer them the confidence to switch and save.

2011 is going to be a challenging year for retailers and when using price as a selling tool hopefully they won’t underestimate their customers and truly strive to deliver genuine offers, and not just play around with offers and POS – time will tell.

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