In the supermarket aisles, the battle for shoppers’ hearts and minds-nay, eyes and bellies-is relentless. And retailers have many strategies with which to attempt to do so: there’s strategy behind everything, from the way a product is priced, where it’s put on a shelf, and the type and amount of advertising for it.
There are several strategies retailers employ in setting prices, according Venkatesh Shankar, a marketing professor at University of Maryland. One is price consistency: the retailer chooses whether to offer periodic discounts on foodstuffs-called HiLo pricing-or, like Walmart, use the every day low pricing scheme. Then there’s promotion intensity-the depth, duration, and frequency of a discount on cream cheese, say. A third lever is promotion coordination: flood the airwaves with commercials for a product, and discount it in stores at the same time.
The most coveted shelves are those at an adult’s eye level-and that is where most of the premium priced, and popular are found-often side-by-side. An expensive product is often to the right of a popular one, to entice right-handers to pick them up instead.
Finally, there’s the amount and type of advertising for a product-since advertising is of two kinds: there’s the generic, which seeks to drum up sales for a particular product not a brand; and also brand advertising, which differentiates a product from its competitor. Oddly enough, studies have shown that generic advertising by one brand has knock-on effects for the same product of a competing brand-which can allow a smaller maker of the same product keep up to its larger competitor, while spending little or no money on advertising.
Keep that in mind the next time you lavish your six seconds of attention (on average) on a would-be purchase at the grocery store.
Sources: Marketing Science;
The Economist
-Mike Ghenu
