Prospect store, being the only Supermarket in that section of town is a definite advantage for the organization. Having an increase in marketing expenses from the new strategy will be offset with Hi value supermarkets every day low pricing sales and market share.
Centralia is also a very high traffic trade area in central Missouri leaving Hi-Value with a high opportunity to gain a larger consumer base if they make the right decisions to increase market desirability. Although their products are of high quality and most consumers seem aware of this, the high prices in many categories may not seem worth the trade off.
Implementing low prices will keep Hi -Value competitive with other markets in the area. However, there are circumstances which motivate some retailers to change. This recommendation would cover both problems and give them the ability to begin gaining market share from their competitors once again.
A supermarket interview was conducted to give customers an opportunity to share their overall thoughts and experience they had when shopping at local supermarkets in Centralia.
If your prices are higher than there needs to be a justifiable reason, so in this case Hi-Values justifiable reason would be again to work on customer image. Along with that it may be a good idea as well if they focused more on offering a better variety of bakery items as well for customers to enjoy.
Each store has been renovated throughout the years, but they are still located in older buildings which does hinder their public image.
The segments consist of two different sets of customers with different buying patterns, both purchases and pre-purchase research. By starting an advertising campaign after the decision on changes to be done to the store, Hi-Value has the ability to publicly announce their updated policies via television making the entire centralia sector aware.
It is also important to note the key findings gathered from the two focus groups. Obviously their current pricing strategy is the largest problem for the store. EDLP can also result in more predictable consumer demand and therefore fewer stocking and supply-chain problems.
Hi-Value is ranked as a medium between its competitors. Because price is believed to be the most important store choice determinant for customers, this may be a strategy that Hi-Value should consider.
Hi-Value has multiple locations but has highly priced merchandise. These buying trends would predict that many grocers would switch from high-low pricing to EDLP, if the cost to switch was minimal. While consumers state in surveys that they prefer the convenience and savings of EDLP, they actually tend to purchase more when high-low pricing strategies are employed.
As of now 89 percent of their sales are devoted to advertising.
How to cite this page Choose cite format: Wal-Mart opened its first store in in a market where Kmart had been the dominant player using a high-low pricing strategy.
High-low pricing strategies generally result in lower variable costs, since promotional retailers can move more products by offering discounts. Price-vigilant consumers, often referred to as "cherry pickers," tend to be attracted to discounts. In the last several decades, consumers have been less able and less willing to spend time reading circulars and newspaper ads to find the best prices.
The questions were asked based upon the characteristics each store had to offer. It is understood that price is the most important store determinant for the residents, which poses a problem for Hi-Value. Altering their advertising slogan, start advertising on television, and targeting shoppers outside of Centralia will increase sales and market share.1).
Implement “Everyday low-pricing” strategy to all Hi-Value Supermarket products: By choosing to implement “Everyday low-pricing” strategy to all Hi- Value Supermarket products in Centralia, Missouri, Hi- Value would begin direct competition with Harrison’s via most reasonable prices.
2) Implement everyday low pricing strategy to grocery and perishables only: Hi-Value can implement an everyday low pricing strategy limited to grocery and perishable items only to products in Centralia, Missouri.
Do you really want to delete this prezi? Hi-Value Supermarket's pricing objectives are not consistent with their overall marketing objective. "Hi-Value Supermarkets = Superior Value" 1. Everyday Low Pricing FEASIBLE SOLUTION 2. Selected Product Every Day Low Pricing FEASIBLE SOLUTIONS 3.
Increase Advertising & Decrease Pricing. Hi-Value Supermarkets- Everyday Low Pricing Case Analysis Kimberly Stamos MKT Section 51 Professor Ivan Vernon April 11, Case Analysis I.
Factual Summary Hi-Value Supermarkets became a division of Hall Consolidated, a privately owned wholesaler and retail food distributor in James Ellis, the senior vice president of Hall Consolidated and president of Hi-Value supermarkets, must decide whether to pursue an everyday low pricing (EDLP) strategy at its three Centralia MO locations.
A study of an store supermarket grocery chain in the United States concluded that a 10% EDLP price decrease in a category increased sales volume by 3%, while a 10% high-low price increase led to a 3% sales decrease. Because consumer demand at the supermarket did not respond much to changes in everyday price, an EDLP policy .Download