Wednesday, May 15, 2013

What price convenience?

Price is always an interesting and complex area for marketers to deal with and get right but today I saw an example which shows how price isn't always proportional to the amount of product received.

At a mainline rail station and wanting some water to drink I looked at one of the station vendors and saw water at £1.89 for 50cl - paying almost three times the price of petrol for water didn't appeal so I went into the Sainsbury's local in the station and saw that they had their own brand Caledonian water at 50p for 50cl - much more realistic! However, I then noticed the 2ltr bottle at ......... 50p! So four times the quantity for the same price, why would anyone buy the smaller bottle? There was also a 75cl bottle (with sports cap) for 89p. All these were the same brand and therefore should be identical product.

This shows a great example of pricing to recognise the customer need, the convenience of the smaller bottle makes it attractive even if you can get four times the amount for the same price, whilst some will pay more per volume than the other options for the sports cap on the 75cl bottle. Selling less volume for a higher price to people willing and happy to pay for it - how great is that!

The lesson from this - make sure you understand your audience and how to maximise their spend, whilst offering options, an area covered in various CIM qualification course delivered by SPA Professional Academy.

And which did I buy? The 50cl bottle, because it was convenient and I didn't want to carry a 2ltr bottle with me.