I know that pricing may not be a very interesting subject to a typical meat cutter working for a chain operator because somebody else is responsible for it. However, for department managers working in the same chain operation should have a clear understanding of overall pricing policies within his category of business.
Although a manager may not have direct involvement in the pricing of meat department goods he can use the company pricing to create more sales for his department if he uses certain strategies. Here are a few example: Now stay with me here and convert these example to fit your departments if needed.
A) "The Play Strategy". Have you ever gone to a white tablecloth restaurant and when you opened the menu and look at the prices of a N.Y. Strip at $27.00, fillets at $35.00 your knees begin to knock-together. You would like to get up and walk away but your are committed. You then turn the menu over and see ground sirloin burgers at $12.95 or grilled chicken at $15.95 and possibly grilled pork chops at $17.00. You knees stop knocking and you choose one of the lesser costing meals because they look like a bargain to you. "That's the gotcha moment".
The strategy here is to put the high priced items up in front so you may select a lesser priced meal that may be a higher profit for the restaurant. Either way it is a win, win situation.
Now let us use this pricing strategy for a meat department. We will use the beef-roast section as an example. Round roast or even chuck roast are now up over or near $5.50 per pound and moving very slow. If you display a few more expensive roast like maybe a flat iron roast at $8.00 per lb. or a strip steak roast for $15 per pound or rib eye roast for $17 per lb. and even a whole tenderloin at $19 per lb. in the roast mix. If a customer has made a commitment to her family that she is going to serve something special for dinner the round or chuck roast will look like a bargain compared to the higher priced roast. She is committed to a roast for dinner and she isn't going to drive across town to find cheaper beef and will pay your price! A win, win for your store.
B) "The Target Strategy". Lets look at pork chops. You have been told by (I will borrow this euphemism from The Cowboy) "The Meat God" that the highest gross profit is in thin sliced pork chops. So you say to yourself, but I sell more regular cut pork chops than thin sliced so what can I do about it. Well if a customer has only two options, regular cut @$2.95 per lb. and thin cut @ $3.19 he/she will probably choose the less expensive one. So a little pricing strategy may turn that around for you. So now create your target ( thin sliced pork chops) and give the customer a "3rd option" like possibly boneless. Now you use a little pricing psychology and he/she may gravitate to the mid price item which is your target item. Now the customer see this (example)
:Regular cut pork chops $2.99 per lb. ; Thin slice pork chops at $3.19; Boneless pork chops $3.99.
C) The Power of the number 9. Yep, this may be an old wives tale but it still works today and I use it myself in my business. As a mater of fact in todays price-analyzing data systems they can now prove that $9.99 priced items sell more goods than $10.00 priced items. Up to 20% more. So keep that in mind too!
