The most common product I purchase would have to be organic foods from the grocery store. Although these foods are from different producers, I feel as though most if not all utilize marking skimming as their marketing strategy for pricing their goods. Many organic foods are priced much higher than the average food product, usually doubling in cost, if not more. I have yet to find an organic food product that was the same price or cheaper than your typical comparable food item at the store. With the use of market skimming, organic food companies are focused on selling to buyers who value their product and recognize that a quality product or food source comes with a price. People who prefer to eat organic foods are typically inclined to pay whatever price that product comes with, since finding organic foods can be challenging to begin with. Since there are not as many organic food producers as there are non-organic food producers, target consumers have no choice but to purchase whatever organic brands are available for the foods they are looking to buy. Although there are less sales for organic items, organic producers know their market will always come back for more, ensuring more organic sales in the future. Although the prices are set higher, the pricing strategy does reflect value. As previously stated people who find the value in consuming organic and all-natural foods are going to continuously come back for future purchases, typically despite of the higher price. Along with that, organic goods can be hard to come across in some situations, so any option that is available will be chosen. The potential buyers who are likely to be dissuaded by the product’s pricing would have to be consumers new to the organic foods world. People who want to make a healthier decision for their food intake and are just starting out with making organic purchases may very well be disappointed with how much more they will be spending on food with making this decision. Maybe in the future, more organic companies will attempt market penetration pricing, to gather more consumers and help shed some light on the overall importance of eating healthy. This would benefit organic producers immensely, as more people would be able to afford this lifestyle change and realize the value and importance of eating organic. How much control do you think the grocery stores has over pricing organic foods while remaining competitive, and what would your recommendation be for either maintaining the same pricing strategy or adapting to another pricing strategy based on the information in the post?
The most common product I purchase would have to be organic foods from the grocery store. Although these foods are from different producers, I feel as though most if not all utilize marking skimming as their marketing strategy for pricing their goods. Many organic foods are priced much higher than the average food product, usually doubling in cost, if not more. I have yet to find an organic food product that was the same price or cheaper than your typical comparable food item at the store. With the use of market skimming, organic food companies are focused on selling to buyers who value their product and recognize that a quality product or food source comes with a price. People who prefer to eat organic foods are typically inclined to pay whatever price that product comes with, since finding organic foods can be challenging to begin with. Since there are not as many organic food producers as there are non-organic food producers, target consumers have no choice but to purchase whatever organic brands are available for the foods they are looking to buy. Although there are less sales for organic items, organic producers know their market will always come back for more, ensuring more organic sales in the future. Although the prices are set higher, the pricing strategy does reflect value. As previously stated people who find the value in consuming organic and all-natural foods are going to continuously come back for future purchases, typically despite of the higher price. Along with that, organic goods can be hard to come across in some situations, so any option that is available will be chosen. The potential buyers who are likely to be dissuaded by the product’s pricing would have to be consumers new to the organic foods world. People who want to make a healthier decision for their food intake and are just starting out with making organic purchases may very well be disappointed with how much more they will be spending on food with making this decision. Maybe in the future, more organic companies will attempt market penetration pricing, to gather more consumers and help shed some light on the overall importance of eating healthy. This would benefit organic producers immensely, as more people would be able to afford this lifestyle change and realize the value and importance of eating organic.
- How much control do you think the grocery stores has over pricing organic foods while remaining competitive, and what would your recommendation be for either maintaining the same pricing strategy or adapting to another pricing strategy based on the information in the post?
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