Wednesday, November 11, 2015

A Manipulative Move by Stores: Buy the product that’s within your reach

Most residents of Pittsburgh have been to Giant Eagle (a chain of grocery stores) at one point or another. I myself am a regular visitor. A few weeks back, I was a little surprised to see that the shelf that contained the green beans I always bought now contained something else labelled as “organic”. In fact, the surrounding shelves also contained only organic vegetables. I was not very happy about this change especially because these organic vegetables costed three times as much as “inorganic” vegetables. (I need not mention how broke graduate students usually are.) Furthermore, now I had to go and find the new place where they were keeping my green beans. I was wondering why they were unnecessarily putting people through this discomfort.

Now I understand why. As I learnt about the Cola Wars and how the concentrate producers invested in marketing strategies that also included intricate details such as acquiring the right shelf space in retail stores, I was impressed by this new strategic move by Giant Eagle. They were showcasing their best quality products in their most accessible and most frequently visited shelves. This could potentially cause many consumers to switch to organic products, which would in-turn enhance Giant Eagle’s revenue.

I then moved on to buy my breakfast cereal. Luckily, nothing had been moved in this aisle. There was a wide variety of cereals to choose from. I picked up Giant Eagle’s in-house breakfast cereal, which came at a modest price in simple packaging and good taste. This product, though not placed in the most conspicuous part of the shelf, was being purchased by quite a few people. I believe that its sales could be attributed to its competitive price. This was yet another great move by Giant Eagle. It is aware of the fact that it may not be equivalent to Kellogg’s or Cheerios in terms of size or revenue and therefore, lets them have the best shelves. However, with minimum costs of overheads and a competitive price, it can still make a profit. The bottlers at Coke have also tried to minimize their costs by using cheaper raw materials such as corn syrup instead of sugar and reusable glass packaging in a few countries. Also, Coke had aggressively reduced its price to 5 cents a bottle for soldiers participating in World War II to increase its popularity.

Although I did not enjoy walking through the aisles of Giant Eagle that day just to find old products in new places, I now admire the extra-ordinary efforts that lie behind setting up an ordinary grocery store. I did not end up buying any of the new strategically placed products since I currently have “limited means”. However, in a situation free of such constraints, these are tried and tested strategies that have worked well for giants like Coke and Pepsi and should probably work out for Giant Eagle as well.

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