What I See When I Shop

When I’m in stores, this is how I see the world…

See below for what each number represents:

1. In Walmart, although these are different products, they are all within the breakfast category and are staples for households. Milk and tropical drink are competing for beverage choice based on preference and use.

2. The lowest-priced item(Tampico at $2.12) is exactly 50% of the highest-priced. The comparison makes the middle option (breakfast meat) seem expensive at $4.24 because it is double the price of the initial $2.12 as a consumer reads left-to-right

3. Now comparing the $4.24 price to the milk at $3.40 makes the price of milk seem more reasonable because it is only 20% less than the meat price. However, compared to the alternative beverage at $2.12, the milk is 60% more expensive.

4. The consumer is now only considering the two right purchases which are both Walmart brands. This benefits Walmart the most than selling the third-party Tampico.

5. The Tampico is the decoy in this scenario as the low price now is irrelevant. However, it can be purchased as an “add-on” or “why not” purchase since it now looks so cheap.

6. This process may eventually lead the consumer to purchase all three products because of the justification from the pricing strategy. This collective purchase is further justified because all three add up to less than $10.00 which is a nice threshold for those shopping on a budget (which Walmart targets)