There seems to be an ad war happening in Denver between mega-store mogul Walmart and dominant grocery store chain King Soopers. You can’t seem to get in your car without hearing an ad or seeing a billboard about either Walmart’s “lower prices,” or King Soopers “better value for your family.” So when it comes to branding, who’s got the better position?
Studies have shown that most customers don’t solely rely on price to make their purchasing decisions. When a purchasing situation arises price is one of several variables customers evaluate when they mentally assess a product’s overall value. Other factors that affect a decision are time, quality, and other related expenses that might be incurred.
Blogger Chris Guillebeau commented on the importance of price and value by saying “The important thing to understand is that buying something is not simple. If you price something too high, you alienate buyers. If it’s priced too low, this is also a big mistake, because perceived value is directly related to price. People are skeptical of advice on the cheap.”
On the flip side, in times of recession, buyers do tend to pay greater attention to messages about pricing as their checkbooks are tighter. Cost-related messaging is a great way to get some fast public attention, but it can also have a negative net return later on. Blogger Mark Murnhan warns “It takes more effort to find value-shoppers than to find price-shoppers, but they are worth every bit of it. They will be back, and they will tell their friends.” If you bank on getting the attention of an audience of “quick prospects” who may be in for a one-time cheap deal, you may miss your best customers in the process, the ones who will stay with you long term.
While saving a few dollars does sound appealing to me, I definitely fall into the loyal King Soopers category. Maybe it’s because my mom drug me there for years as a kid, and I’ve just grown accustomed to it, or maybe it’s because subliminally, I really do like the “value” I receive when I shop there. Either way, I may run into a Walmart for a quick one-time purchase, but I’m doing my weekly shopping at King Soopers. Where will you be shopping?