Sunday, August 11, 2013

Pricing the Kind Bar

Today's New York Times has an excellent article about pricing, "Doing the Math on a Snack." It's all about how different retailers price the Kind bar, produced by Kind Healthy Snacks and marketed with a brand image of quality, healthiness, and social responsibility.

Kind relies on a multichannel distribution strategy, selling online (direct to consumer and through online merchants) and in different types of retail outlets, including natural foods grocery chains (Whole Foods, Trader Joe's), drug chains (Duane Reade), mass merchants (Walmart and Target), and newsstands/stores at transportation hubs (subway entrances, airport kiosks).

When the New York Times comparison-priced Kind, it found a range of retail prices from a low of $1 per bar (at a Whole Foods store) to a high of $3.50 per bar (at a newsstand at Kennedy Airport).

Why such variation in pricing for the same product? The retailers didn't explain, but the director of Columbia University's Center for Pricing & Revenue Management told the newspaper that stores are probably setting a price they know they can get consumers to pay, especially if the consumer's options are limited (such as being at the airport).

Try this pricing comparison yourself. I found, today, 12 Kind cranberry-almond bars selling on Walmart's web site for $14.44 (note the unusual price point, a signature of Walmart). The same 12 bars were selling via Amazon from Kind itself for $13.72. What prices can you find?

Oh, and of course Kind is social media savvy: Look for the brand on Facebook (136,000 likes) and Twitter (18,000 followers).

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