| Pricing: Understanding and Capturing Customer Value 305
Chapter 10 | Pricing: Understanding and Capturing Customer Value 305
able place to shop. To help consumers see the Real Marketing 10.2 value, it beefed up its communications about
private-label and sale items using newsletters,
Whole Foods Market: coupons, and its Web site. It assigned workers
Price and Value
to serve as “value tour guides” to escort shop-
in a Troubled Economy pers around stores pointing out value items.
New ads featured headlines such as “No wallets were harmed in the buying of our
Only a few years ago, consumers were flush
365 Everyday Value products,” and “Sticker with cash, and Whole Foods Market was thriv-
sortment, cut prices, and reposition down-
shock, but in a good way.” ing. The upscale grocery retailer was a model
ward to fit the new times. But that strategy
But the new marketing efforts did more “more-for-more” marketer, offering premium
would sacrifice most of what had made the
than simply promote more affordable mer- value at premium prices. Under its motto,
upscale grocer unique over the years.
chandise. They worked to convince shoppers “Whole Foods, Whole People, Whole Planet,”
So Whole Foods Market decided to stick
that Whole Foods Market’s regular products it served up a gourmet assortment of high-
with its core up-market positioning but subtly
and prices offer good value as well—that quality grocery items, including a strong mix of
realign its value proposition to better meet the
when it comes to quality food, price isn’t natural and organic foods and health prod-
needs of recession-rattled customers. It set out
everything. As one tour guide notes, wherever ucts. Its upscale, health-conscious customers
to downplay the gourmet element of its posi-
you go, you’ll have to pay a premium for or- were willing and able to pay higher prices for
tioning while playing up the real value of the
ganic food. “Value means getting a good ex- the extra value they got. Over the previous two
healthy but exciting food it offers. First, rather
change for your money.” Such conversations decades, Whole Foods Market’s sales had
than dropping its everyday prices across the
helped to shift customers’ eyes off of price and soared, and its stock price had grown at an eye-
board, Whole Foods lowered prices on many
basic items that customers demand most and
back to value.
popping compounded annual rate of 25 per-
To strengthen customer relationships fur- cent, peaking at almost $80 a share.
bolstered these savings by offering significant
ther in tighter times, Whole Foods Market also Then came the Great Recession of 2008.
sales on selected other items. It also started
boosted its social media presence. It set up a People in all walks of life began rethinking
emphasizing its private-label brand, 365 Every-
Facebook page and dozens of Twitter ac- the price-value equation and looking for ways
day Value.
counts to address specific value and other top- to save. They asked tough questions, such as
Next, Whole Foods Market launched a
ics related to every product category and every “I love the wonderful foods and smells in my
new marketing program aimed at tempering
store. Videos on its Whole Tube YouTube chan- Whole Foods Market, but is it worth the extra
the chain’s high-price reputation, reconnect-
ing with customers, and convincing them that
nel advised customers to “waste not, want
not.” At the official Whole Foods Market of a sudden, Whole Foods Market’s seemingly perfect premium marketing strategy looked less like a plum and more like a bruised or- ganic banana. Even relatively affluent cus- tomers were cutting back and spending less. For the first time in its history, the company faced declines in same-store sales, and its stock price plunged to a shocking low of close to $8. “The company had long touted its premium food offerings in its marketing, and that branding [was] now actually hurting them,” observed a retail analyst. Some cus- tomers even amended the company’s motto, making it “Whole Foods, Whole Paycheck.”
30 percent versus shopping at Walmart?” All
Whole Foods Market was, in fact, an afford-
Hit hard by the economic downturn, Whole Foods Market faced difficult questions. Should it hold the line on the premium posi- tioning that had won it so much success in the past? Or should it cut prices and reposition it- self to fit the leaner times? On the one hand, it could simply batten down the hatches and wait for the economic storm to pass. But a wait-and-see strategy made little sense; the
When the economy dipped, rather than cutting everyday prices, Whole Foods set out to
newfound consumer frugality probably will
convince shoppers that it was, in fact, an affordable place to shop. It even assigned
last for years to come. At the other extreme,
workers to serve as “value tour guides,” like the one above, to escort shoppers around
Whole Foods could reshuffle its product as-
stores pointing out value items.
Parts
» | Marketing: Creating and Capturing Customer Value 3
» | Marketing: Creating and Capturing Customer Value 11
» | Marketing: Creating and Capturing Customer Value 13
» | Marketing: Creating and Capturing Customer Value 25
» | Marketing: Creating and Capturing Customer Value 29
» | Company and Marketing Strategy: Partnering to Build Customer Relationships 37
» | Company and Marketing Strategy: Partnering to Build Customer Relationships 41
» | Company and Marketing Strategy: Partnering to Build Customer Relationships 43
» | Company and Marketing Strategy: Partnering to Build Customer Relationships 51
» | Company and Marketing Strategy: Partnering to Build Customer Relationships 55
» | Company and Marketing Strategy: Partnering to Build Customer Relationships 57
» | Company and Marketing Strategy: Partnering to Build Customer Relationships 63
» | Analyzing the Marketing Environment 65
» | Analyzing the Marketing Environment 71
» | Analyzing the Marketing Environment 73
» | Analyzing the Marketing Environment 77
» | Analyzing the Marketing Environment 79
» | Analyzing the Marketing Environment 81
» | Analyzing the Marketing Environment 85
» | Analyzing the Marketing Environment 87
» | Analyzing the Marketing Environment 89
» | Managing Marketing Information to Gain Customer Insights 97
» | Managing Marketing Information to Gain Customer Insights 99
» | Managing Marketing Information to Gain Customer Insights 103
» | Managing Marketing Information to Gain Customer Insights 109
» | Managing Marketing Information to Gain Customer Insights 111
» | Managing Marketing Information to Gain Customer Insights 113
» | Managing Marketing Information to Gain Customer Insights 115
» | Managing Marketing Information to Gain Customer Insights 127
» | Managing Marketing Information to Gain Customer Insights 131
» | Consumer Markets and Consumer Buyer Behavior 133
» | Consumer Markets and Consumer Buyer Behavior 137
» | Consumer Markets and Consumer Buyer Behavior 141
» | Consumer Markets and Consumer Buyer Behavior 143
» | Consumer Markets and Consumer Buyer Behavior 159
» | Consumer Markets and Consumer Buyer Behavior 163
» | Business Markets and Business Buyer Behavior 165
» | Business Markets and Business Buyer Behavior 175
» | Business Markets and Business Buyer Behavior 179
» What is Eaton’s value proposition?
» | Customer-Driven Marketing Strategy: Creating Value for Target Customers 189
» | Customer-Driven Marketing Strategy: Creating Value for Target Customers 193
» | Customer-Driven Marketing Strategy: Creating Value for Target Customers 197
» | Customer-Driven Marketing Strategy: Creating Value for Target Customers 203
» | Customer-Driven Marketing Strategy: Creating Value for Target Customers 205
» | Customer-Driven Marketing Strategy: Creating Value for Target Customers 207
» | Customer-Driven Marketing Strategy: Creating Value for Target Customers 209
» | Customer-Driven Marketing Strategy: Creating Value for Target Customers 211
» | Customer-Driven Marketing Strategy: Creating Value for Target Customers 213
» | Customer-Driven Marketing Strategy: Creating Value for Target Customers 219
» | Products, Services, and Brands: Building Customer Value 223
» | Products, Services, and Brands: Building Customer Value 225
» | Products, Services, and Brands: Building Customer Value 229
» | Products, Services, and Brands: Building Customer Value 237
» | Products, Services, and Brands: Building Customer Value 245
» | Products, Services, and Brands: Building Customer Value 247
» | Products, Services, and Brands: Building Customer Value 249
» | Products, Services, and Brands: Building Customer Value 251
» | Products, Services, and Brands: Building Customer Value 257
» | New Product Development and Product Life-Cycle Strategies 259
» | New Product Development and Product Life-Cycle Strategies 271
» | New Product Development and Product Life-Cycle Strategies 273
» | New Product Development and Product Life-Cycle Strategies 279
» | New Product Development and Product Life-Cycle Strategies 281
» | Pricing: Understanding and Capturing Customer Value 289
» | Pricing: Understanding and Capturing Customer Value 291
» | Pricing: Understanding and Capturing Customer Value 295
» | Pricing: Understanding and Capturing Customer Value 299
» | Pricing: Understanding and Capturing Customer Value 305
» | Pricing: Understanding and Capturing Customer Value 307
» | Marketing Channels: Delivering Customer Value 339
» | Marketing Channels: Delivering Customer Value 347
» | Marketing Channels: Delivering Customer Value 351
» | Marketing Channels: Delivering Customer Value 367
» | Retailing and Wholesaling 373
» | Retailing and Wholesaling 377
» | Retailing and Wholesaling 379
» | Retailing and Wholesaling 393
» | Retailing and Wholesaling 395
» | Retailing and Wholesaling 397
» | Retailing and Wholesaling 401
» | Retailing and Wholesaling 405
» | Communicating Customer Value: Integrated Marketing Communications Strategy 407
» | Communicating Customer Value: Integrated Marketing Communications Strategy 411
» | Communicating Customer Value: Integrated Marketing Communications Strategy 413
» | Communicating Customer Value: Integrated Marketing Communications Strategy 415
» | Communicating Customer Value: Integrated Marketing Communications Strategy 429
» | Communicating Customer Value: Integrated Marketing Communications Strategy 433
» | Advertising and Public Relations 435
» | Advertising and Public Relations 439
» | Advertising and Public Relations 441
» | Advertising and Public Relations 443
» | Advertising and Public Relations 445
» | Advertising and Public Relations 447
» | Advertising and Public Relations 449
» | Advertising and Public Relations 453
» | Personal Selling and Sales Promotion 463
» | Personal Selling and Sales Promotion 469
» | Personal Selling and Sales Promotion 471
» | Personal Selling and Sales Promotion 481
» How is the sales force at Nestlé Waters structured? outsells its top competitors.
» | Direct and Online Marketing: Building Direct Customer Relationships 495
» | Direct and Online Marketing: Building Direct Customer Relationships 499
» | Direct and Online Marketing: Building Direct Customer Relationships 507
» | Direct and Online Marketing: Building Direct Customer Relationships 509
» | Direct and Online Marketing: Building Direct Customer Relationships 515
» | Direct and Online Marketing: Building Direct Customer Relationships 525
» | Creating Competitive Advantage 527
» | Creating Competitive Advantage 529
» | Creating Competitive Advantage 537
» | Creating Competitive Advantage 549
» | The Global Marketplace 551
» | The Global Marketplace 553
» | The Global Marketplace 561
» | The Global Marketplace 573
» | Sustainable Marketing: Social Responsibility and Ethics 581
» | Sustainable Marketing: Social Responsibility and Ethics 583
» | Sustainable Marketing: Social Responsibility and Ethics 587
» | Sustainable Marketing: Social Responsibility and Ethics 595
» | Sustainable Marketing: Social Responsibility and Ethics 603
» | Sustainable Marketing: Social Responsibility and Ethics 605
» | Marketing by the Numbers A21
» | Marketing by the Numbers A27
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