Thursday, April 30, 2009

$19.16 for Diet Canada Dry?


I could get over the fact the the person who stocked this shelf did not face it correctly. I could even make an excuse for that employee, letting myself believe that customers flipped the cases of soda so they'd not be "right." Contrary to what at least a few of you might think, I could even pass by this shelf without straightening these products. 

What caught my attention and I could not ignore was this signage and these posted prices. What were they thinking? If you know anything about retail, you've heard of price point. While I do not understand all of the ins and outs of economics, I do understand the basic principles of "customary price point" which rely on the fact that people are used to paying a certain price for a product and when that product is priced higher than the customary price, sales drop. 

I personally think that this was a mental game that Target was playing with customers. The reality is, the prices of canned soda are increasing and I suspect that when the new prices hit the shelves, people cut back on soda purchases. How do you get buying started again?  

Pepsi packages their 12 ounce cans in cases of 8 instead of 12, making the per package price less (but not that much less) than the 12 can case. (This makes me crazy -- like all of the companies which now put 1.75 quarts of ice cream in the traditionally "half gallon" container.)  

The other option -- the one that may have been happening here at Target -- is to shock customers with significantly higher prices and then come down just enough that they start buying again. (Or they could be "over pricing" this product line in order to make us feel better about what they are charging for Coke and Pepsi products.)

If you live in the States, don't you feel a lot better about $2.19 per gallon gasoline and about driving an SUV than you did when gas was about this price BEFORE it went up to $4 a gallon?  

Now, let's not forget that I really do not understand consumer economics in any academic sense. I do know that my reaction to this is "do they really think anyone will pay $19.16 for soda?" knowing full well that people spend well over that for soda all the time. The difference is, they do it $3 and $4 at a time.

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