by Sean Grudzinski, HRG product research and analysis manager, for the Lasting Impressions series
As part of the overall positive impression you’re trying to make, your front-end pricing is an important component. You may not even be aware that your prices can convey a lot about your store, but prices can speak volumes. When you are setting your pricing strategy, a good place to begin is with your overall branding and how you want your store to be perceived.
Your pricing strategy should fit with your store’s business strategy. How are you positioning your pharmacy in your community, and how do you want to be perceived compared to your competitors? When you have these answers, align your prices to reflect your branding and image – low, competitive, or higher (perhaps to reflect robust services offered).
Do be consistent with your rules for parity, line, and family pricing. (Parity is price per unit. Larger sizes should be a better value than smaller sizes.) Consistency builds a stronger image, giving your customers a pricing framework to rely on. Consider a rounding routine to maximize profits and simplify pricing; and make sure you think about everyday versus promotional prices. Establish guidelines around any sale prices or markdowns so there is uniformity.
Don’t rely solely on signs to promote special prices or to create a perception of value. There are many ways to communicate your pricing image. Use POP signs, banners, in-store flyers, marketing circulars, bag stuffers, and direct mailers to highlight sales and competitive pricing.
It’s a good idea to change prices regularly to adjust for market trends and cost changes. This will ensure you maintain your level of profitability. Incremental price changes, to protect profit or remain competitive in the market, are far more acceptable to shoppers than larger, abrupt changes that may be more of a shock.
Pricing doesn’t have to be complicated. Find a structure and strategy that works in your store, among your competitors, and for your customer base. Once you have set your guidelines, you should revisit your strategy annually to make sure it aligns with your goals. Also, make sure you don’t build your relationships around price. Focus on the value you are providing your customers through your service and care – that’s how you will leave a positive lasting impression.