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Price Line Strategy – when and how to differentiate prices

Imagine you’re in the supermarket to buy some yoghurt. The most important feature for you is that the yoghurt is lactose-free, so you search that section of the fridge area. You quickly identify your size and brand and start to think about which flavour to go for. But how unfair does it feel when you discover the flavour you want is more expensive than the other flavours?

Customers don’t care about different cost per SKU (stock keeping unit), or slightly different line extensions. They want logical shelf prices that make it easy to find the products that meet their needs. This requires a balance of art and science, and the retailers who get this right will find themselves with more loyal customers and stronger price perception.

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