Saturday, May 26, 2012

Math Challenged Marketers

Today, I went to a major grocery chain to purchase a few staples that we needed.  We usually buy the small size mayonnaise since the larger size usually goes bad before we can finish it.  Makes sense.  We don't want to buy more a lower price per ounce and then waste half of it.  The end result is still that we pay more.

So I go to the store expecting to buy the smaller size, which goes against my instinctive purchase habits.   However, when I get to the store I am surprised by the pricing.  The 16 ounce size of the branded mayonnaise is $4.69.   For comparison, I checked  the price of the large 32 ounce size.  The price was $4.48, $0.21 cheaper.   In addition, the 32 ounce size was on sale for $2.99.

Given the unexpected price discrepancy, I decided to confirm the UPC bar codes to make sure I was matching the price to the right product.    They were a match, the smaller size was more expensive.  In addition, I had a $1.00 off coupon for sizes over 16.5 ounces to make the final price of the large size $1.99.

32 ounce size - regular price $4.69, sale price $2.99, coupon price $1.99
16 ounce size - regular price $4.88

Personally, I don't understanding the pricing strategy.  When I lived in Japan, smaller was sometimes more expensive since people didn't have space for large quantities.  But I don't see the logic for the U.S., where most people can handle a 32 ounce jar of anything.  I guess I need an MBA in marketing to understand the reason for the pricing.

Needless to say, I bought the l32 ounce size of the branded mayonnaise.   If we only use 16 ounces before it goes bad, so be it.

For more on  Reflections and Musings, check back every Saturday for a new segment.

This is not financial or grocery shopping advice. Please consult a professional advisor.

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