28 Jun Strategic Pricing Decisions in Supermarkets
Question
Strategic Pricing Decisions in Supermarkets
During recessionary times, commodity prices may not fall – in fact, many consumer commodity prices frequently continue to rise. For example, in 2008, the average price for a gallon of gasoline was $1.85. In 2012, the price for a gallon of gasoline rose to nearly $4.00/gallon. Not unexpectedly, food prices have risen as well, with the costs to feed a family of four rising over 20% during the same period. Additionally, governmental mandates for “Bio-Diesel” fuel have created a shortage of corn, further exacerbating the rise in global food prices.
Explain how you believe the rising prices affect strategic pricing-decisions made by companies that produce packaged food, cereals, canned meats and other common products found in a supermarket. Your discussion should include an examination of how consumer behavior might impact those pricing, marketing, and packaging decisions.
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