Kevin Harrington // marketing // blog

You know, I really don’t like shopping at Asda. But you never know, I could get converted. Recently I have been impressed with a number of their marketing activities:

1. I’ve heard some really good things about the way Asda motivate and acknowledge their staff. It sounds like they are setting a standard in the supermarket sector.
2. Asda seem to have managed to manipulate average basket prices to be frequently the lowest and sometimes half the price of Waitrose.
3. And now Asda plans to launch its own social networking site, designed to increase customer interaction. A brave move perhaps? Some people are wondering whether the supermarket chain is opening itself up to potential criticism from any disgruntled shoppers that may be out there. But frankly, they are better off hearing the feedback and addressing it than ignoring it and letting customers migrate.

So well done Asda. From my point of view choice and quality are things I want to hear are progressing and then I’ll be back to have a look.

Ignore sales promotions, put your prices up and most customers probably don’t care…assuming they notice.

The “big four” of supermarkets, Asda, Tesco, Morrisons and Sainsbury’s, have increased the number of £1 promotional price tags 150% over the past year. This compared with a 6% increase in their general promotions, according to a report compiled on behalf of industry magazine the Grocer.

Source: BBC Magazine

The above article is an extract from an article about the rounding up of prices from 99p to £1. Do the maths: what might that equate to in increased annual profits? Simple and effective; this is a great example of pricing being used correctly in the marketing mix.

Cost plus pricing is on of the biggest evils within businesses. It appears the safe approach but fails to maximise opportunity. Also, taking this approach, sale prices tend to erode to the level of cost prices. This is unacceptable for most businesses.

There are in fact many different solutions to determining a price. Some of the ideas are: temporal/time based pricing; multidimensional pricing; risk based pricing; variable pricing. A chart showing these is available for download.

One of the concepts on the chart is the diamond-water paradox:

The diamond-water paradox is the apparent contradiction, or paradox, that although water is on the whole more useful, in terms of survival, than diamonds, diamonds command a higher price in the market.

Can you suggest any more approached to pricing that I can add to the chart?

High School Musical storage box

Genius! The packaging is the POS and the product. And then you have to make it yourself.

The medium High School Musical storage box when assembled is 290mm wide, 385mm deep and 190mm high. But of course you make it yourself from a flat-packed simple kit where the lid is the product box.

As with most character/film merchandise a healthy premium price is charged as well.

Let’s hope they don’t move into house sales!

There is a fine debate on price, value and consumer choice on the BBC Magazine.

“There is a tendency in this information age to compare prices, and say whichever company will sell me this product at the cheapest price, must be the one that I should purchase.”

Click here for more.

Petrol was down to 99.9p per litre in Reading, Berkshire today. Fabulous. Just two days ago it was 105.9p. It cost me £3 less to fill the tank.

We are all happy enough to moan at the speed prices increase. So I’m giving praise to BP for the rapid deflation.

p.s. the petrol station mentioned is the BP Connect one at the Three Tuns crossroads, Wokingham Road, Reading, Berkshire.

Petrol price surveys

I  was waiting in a line to pay for some petrol at my local BP garage. The delay was caused by the usual number of people buying sausage rolls, milk, cat food and occasionally petrol.

The phone rang and a member of the staff answered the phone. The caller, presumably a competitor or their agent, asked the price of unleaded petrol and diesel per litre.

The BP cashier looked out of the window at the gantry sign with the price indicators and answered the caller by adding 1p per litre to the price.

Does this go on all the time? Is this kind of lying ethical? Whose interests are served by these tactics? Should a retailer allow themselves to be observed employing these tactics?

I personally feel that it is bad for the retailers brand image and it is unethical. It also serves to hold prices higher. This is unless everyone knows the tactics and it is all a daft game.

And what if the caller were a consumer or a price comparison website? This would then result in less business for the retailer that makes their prices appear higher than they actually are.

All very odd. Any thoughts on this?