Set Healthy Margins on Multi-Solution Products

Consumer surveys over the decades find that a product which solves multiple problems or satisfies multiple needs will carry an additional appeal with consumers. So as a retailer, increase your stock of products designed in the tradition of the multi-solution Swiss Army Knife.
     Because there will be toothpaste shoppers who specifically want cavity protection without the chemicals used for tooth whitening, the toothpaste shelf should carry a specialized cavity protection product. But overall, a toothpaste which promises cavity protection plus whitening is likely to sell better than a toothpaste which promises to do just one or the other.
     Yet there's a wrinkle: Although shoppers are attracted to multi-solution products, researchers at Northwestern University found that the shoppers tend to believe such products are inferior in each of the capabilities compared to single-solution products. The product which promises to be a jack of all trades risks being seen as a master of none.
     The Northwestern University research findings suggest that one remedy is for the retailer to charge more for multi-solution products than for single-solution products. The extra cost helps convince shoppers that the product can indeed do more.
     It never pays off in the long run to gouge shoppers with exorbitant prices. But do keep in mind that other trend among shoppers—the search for low prices. To keep customers coming, are you trimming profit margins on many of the single-function products you carry? Boosting margins on multi-solution products may be a way to maintain adequate overall profitability.

For your profitability: Sell Well: What Really Moves Your Shoppers