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Investigating Pricing Strategy

By admin

Following the publication of the report ’10 Pricing Tactics to Watch Out For in the Supermarkets’ by Which?, Brand View have investigated some of the examples cited in more detail.

Swapping Offers on Similar Items

Which? claimed that supermarkets alternate offers on two or three similar items that shoppers might buy interchangeably, swapping the offers between them. This means that they can always sell one of them at a discount.

Brand View found that in the Wine category across Tesco, Asda, Sainsbury’s and Waitrose this is common practice. For example, Blossom Hill red wine was sold at standard price for only 2 weeks out of 39 in Asda, from June until the end of February.

When looking at the brands that have more than one variety of the same colour wine available, Brand View found that a large proportion had been on promotion for more than 30 weeks out of 39 (more than three quarters of the period).

Brands That Have Two or More Varieties of the Same Colour Wine

To see if this applies to your brand, take a look at Brand View’s Promotional History Report as shown in the following screen shot.

Brands that have two or more varieties of the same colour wine

Refill Packs Are Not Always Cheaper

Which? claimed that whilst some products are available as a refill pack, rather than, say, buying another jar, on price alone they may not be worth it.

Brand View investigated this using a variety of products in the Top 5 retailers and some interesting results appeared. Looking at Kenco Eco Refill Rich Roast 150g and Andrex Washlets Moist Toilet Tissue Refill 42ea compared to their ‘non-refill’ equivalent, it was only more expensive to buy the refill when the equivalent was on promotion.

In addition, the cost of Nescafe Refill Pack Gold Blend 150g per 100g has been more expensive than Nescafe Gold Blend 200g per 100g due to the jar being on promotion. However, Tesco sold Nescafe Refill Pack Gold Blend 150g at a more expensive price per 100g than the jar on shelf price for a period of two weeks.

Furthermore, over the last six months in Sainsbury’s and Asda, Schwartz Mixed Herbs 21g has consistently been sold at a higher price per gram than Schwartz Mixed Herbs Refill 9g.

Bigger Pack Does Not Mean Better Value

Which? declared that even though some large packs claimed to be at a special price, buying bigger doesn’t always mean buying cheaper.

Brand View’s pricing history report allows you to look at price changes and trends over time by retailer. You can analyse the results using different price options: shelf price, base price and promoted price. There is also the option to view the price of products by volume, meaning it’s always easy to check the comparative cost of products.

Brand View found that in Waitrose, both a 4 and 9 roll pack of Andrex Classic White Toilet Tissue regularly costs less per roll than the equivalent 12 pack, even though not on promotion.

Similarly, when looking at Coca-Cola there were many examples across Tesco, Asda and Sainsbury’s where buying the largest packs meant that shoppers were paying more per can. For example in Asda it was possible to buy an 8 pack for 31p a can, whilst a 15 or 18 pack would cost 45p and 42p per can respectively.

Pricing History Report Showing Price per Millilitre

Tesco’s Website Does Not Like Monday Mornings

Tesco Fruit products appeared to be more expensive online on Monday mornings. Tesco claimed this was a glitch in the system. However, Brand View looked into the price of fruit products on Sunday and Monday in the first seven weeks of 2014. On five out of seven weeks it was more expensive to shop on the Tesco website on Mondays. The highest increase of £8.50 in the Fruit category was found in week three with 14 price changes, 13 of which were price increases.

Price Variation on Tesco Fruit Products from Sunday to Monday

By using Brand View’s Daily Price and Promotion report you can easily identify when price changes occur between two points.

For assistance on running these reports for your brands and categories, please contact your account manager.

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Brand View is the leading global provider of price, promotion, product content and online product positioning analytics.