A 100-gram package of Milka for an exorbitant 66 crowns. Right next to more than twice the size of a package weighing 270 grams, one crown cheaper. Such an offer was recorded by Fairpress two weeks ago in Billa in Prague’s Jinonice, but it also became the subject of discussions on social networks. However, the customer also encounters the same prices in the Albert supermarket.
When buying a larger, advantageous package, the customer can think about how he has matured for the price policy. However, it is often a deliberate move on the part of the supermarket. In addition, such examples arouse discussions about how chains increase the prices of certain products.
Thoughtful strategy
In some cases, supermarkets approach similar strategies with a clear intention.
“It can also be a test of the market, how it will react to the given price. And it can also be a so-called loss leader. That is, a product that is used in flyer campaigns to bring customers to the store, where they will also buy other goods than what they originally came for,” said marketing consultant Pavel Řehulka.
But one could find many such examples, for example in the beverage department. While a liter and a half of Pepsi Cola costs 25 kroner in Alberta, the practical and compact “half liter” is four kroner more expensive. In short, it is typical for products where customers prefer a certain type of packaging.
“The seller can decide to sell even at a loss. He knows that the customer will buy more goods and the loss will be paid from the margins of other products,” added Řehulka.
But the price dynamics of this chocolate is also surprising. At that time, Milka was many times less expensive in nearby supermarkets. In Billa itself, it costs just 30 crowns and a larger package costs 180 crowns.
“The price depends on the negotiation with the supplier, when in the framework of supporting the sale of their products, a more favorable price for the given product may be negotiated in a certain period,” spokeswoman Billy Dana Bratánková said about the situation.
Practical packages are more popular
“The final creation of prices is a matter of sales strategies, with which chains can try to promote sales of some products at the expense of others. Maybe to get rid of products that don’t sell much,” explained agrarian analyst Petr Havel.
“Business offers are often based on the motto: “Buy more, pay less”. This forces customers to buy more than they need, because when buying a larger quantity, the unit price is reduced,” commented the offer, chief economist of BH Securities and advisor to the prime minister, Štěpán Křeček.
But there are also offers on the market that push this principle to the extreme.
“A small sale of a large package can then lead to a situation where it is put into action. The merchant does not even count on the fact that he would sell small packages. From a longer-term point of view, however, I do not consider this strategy appropriate. The customer can easily suspect that the price of a small package is excessive, which can harm his relationship with the seller,” concluded Křeček.