This paper examines the Superior Supermarkets: EDLP case study through four discussion questions focused on retail grocery pricing strategy. It explores why price is the most flexible element of the marketing mix, weighs the merits of increased price competition against everyday low pricing (EDLP), identifies the factors retailers should consider when diagnosing pricing problems, and compares Superior Supermarkets' marketing approach to Walmart's integrated marketing communications strategy. Drawing on consumer research findings and Hall Consolidated's operational data, the paper argues that effective pricing strategy requires understanding how consumers define and dimensionalize "price" beyond its face value.
In the Superior Supermarkets: EDLP case study, price is considered the most flexible element of the marketing mix because it is the most common and most distinct criterion variable considered by consumers across all supermarkets surveyed — Harrison's, Missouri Mart, Grand American, and Superior. While each supermarket has strengths in certain product offerings, pricing remains the marketing feature that gives consumers the impression they are receiving value for their money. Both qualitative and quantitative research results confirm that pricing is the key determinant among consumers when choosing which supermarket to shop at. Other determinants come into play only after the primary one — reasonable prices — has been satisfied.
Furthermore, competition among retail grocery stores makes it imperative for operators to respond to consumers' need for competitive pricing, while also satisfying other considerations such as store location, quality of products and services, store layout, and shopping convenience.
Developing marketing strategies around increased price competition or everyday low pricing (EDLP) each carries distinct advantages and disadvantages. In an increased price competition model, the supermarket responds to and adjusts its pricing based on a major competitor's strategy. This approach can be responsive to consumers' shopping needs, since the competition ultimately benefits shoppers: whichever supermarket offers lower prices on core grocery items will earn the most patronage. However, price competition can become a disadvantage over time, as pricing tends to grow too narrowly focused on rival activity rather than on the shopper. By reacting to every price change on specific products, the strategy eventually loses cost-effectiveness. As Hall Consolidated noted, "[t]he need to remark merchandise and shelf tags, including labor expense, costs us 60 basis points (0.6% of sales)" (494).
EDLP as a marketing strategy, by contrast, gives shoppers the advantage of discounts across all grocery items every day. Compared to price competition, EDLP is more cost-effective and remains focused on the shopper, since prices are lowered across all product categories and are not heavily dependent on competitors' moves. EDLP also functions as a promotional activity that enhances the overall shopping value and experience. One disadvantage of EDLP, however, is that the concept of consistently low prices may eventually normalize — reaching a point where consumers regard EDLP as the standard rather than as a promotional benefit.
"How to assess whether pricing or other factors are the real issue"
"EDLP and IMC differences between Superior and Walmart"
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