Package Your Products for Premium Pricing

Package deals are as old as retailing. Say you’ve booked a cruise. You’ll be getting your lodging and dining at a lower price than what you’d pay if you arranged for each individually. Are you considering the cable TV/telephone/internet package? You’d be saving big if you decide to get all three together from us. In the 1980’s, did you buy the entrée, the side dishes, and even the dessert in the same Swanson TV Dinner package, getting a full meal deal price?
     In these package deals, the appeal is to cost savings. But another approach is for you to improve your profitability by setting a premium price when you package products, product categories, or product benefits. The customer might ask why they’re paying more. Your answer will have to do with expertise and convenience.

• Expertise. The florist arranges a bouquet to bring out the best from each individual flower there. Whatever products and services you sell, you’ll arrange the individual components to reinforce each other and produce a total that is greater than the sum of the parts. It’s called synergy. The chief chef for the cruise line selects each day’s dinner entrées so they don’t simply repeat what was offered the day before. You’ll pick the product and service combinations that don’t clash with each other.
• Convenience. DiGiorno added to their frozen pizza product line a pizza and breadsticks item. The purchaser would cook both in the oven at the same time. The introduction was so successful that the company launched pizza/Toll House Cookies and pizza/chicken snacks combos. DiGiorno’s marketing messages are based on convenience: “DiGiorno Pizza & Breadsticks... the first-ever pizza and breadstick combination that America can bake up right from their own oven, saving time and effort.” When you combine products and services from your retail store, emphasize the convenience to justify the higher price you’ll set.

     DiGiorno is also using an anchoring technique to position the product price as reasonable: They’re comparing the item price to the price of a parallel purchase from a pizza parlor. Another part of their central marketing message is, “Put the phone down, lose that pizza delivery number and check your freezer….” This is a natural extension of their “It’s not delivery. It’s DiGiorno” tag line, which research indicates actually makes the consumer more likely to think that DiGiorno is comparable to restaurant fare.

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

Click below for more:
Bundle Pricing, But Limit BOGOs
Set Healthy Margins on Multi-Solution Products
Avoid “Not” in Influencing Shoppers
Move the Customer to Accept Higher Prices