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- From: dclark@tolstoy.b11.ingr.com (Dave Clark)
- Subject: Re: Beating the Food World price
- Message-ID: <1992Dec21.213835.19775@b11.b11.ingr.com>
- Sender: usenet@b11.b11.ingr.com (Usenet Network)
- Reply-To: dclark@b11.ingr.com
- Organization: Intergraph Corp.
- References: <1992Dec18.223141.25271@infonode.ingr.com> <Pk22VB1w161w@cdthq.UUCP>
- Date: Mon, 21 Dec 1992 21:38:35 GMT
- Lines: 37
-
- In article <Pk22VB1w161w@cdthq.UUCP>, gary@cdthq.UUCP (Gary Heston) writes:
- |> kenney@tribe.b17d.ingr.com (David Kenney) writes:
- |>
- |> > Recently while shopping at Food World, I noticed that it was cheaper per
- |> > ounce to buy lots of the 18-load size boxes of laundry detergent
- |> > than it is to buy the "Super-Duper Huge" sized box.
- |> >
- |> > Yesterday I noticed the same thing with dishwasher detergent. I had the
- |> > following 2 choices (not including tax):
- |> >
- |> > 50 oz. @ $1.99 or 3.98 c/oz. or
- |> > 65 oz. @ $2.69 or 4.13 c/oz.
- |> >
- |> > What's the deal? Does it really cost more per ounce to produce and package
- |> > larger sized containers, ot have consumers become so accustomed to hearing
- |> > the words "Large Economy Size" that stores can now make a large profit from
- |> > that conditioning?
- |>
- |> No, it costs *less* per ounce to pack in the larger sizes. The
- |> general rule of prices is that the size they want to move this
- |> week will have the lowest price/portion ratio.
-
- This is usually due to a (relatively) new system called Direct Product
- Profit (DPP) which retailers use to compute the product price. DPP
- accounts for a number of factors including shelf life, package size,
- weight, etc. The type of price discrepancy you deserved is often due
- to the fact that, since larger items take up more shelf space, they are
- computed to cost the retailer more to sell _per_unit_.
-
- ----------------------------------------------------------------------------
- |
- Dave Clark | "The highest type of ruler is one of whose
- Graphics Performance | existence the people are barely aware."
- Intergraph Corp. |
- dclark@b11.b11.ingr.com | -- Lao Tzu
- |
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