Tag Archives: consumer behavior

by | Saturday, September 7, 2024 · 4:39 pm

Luxury Fruit Comes at a High Price

Don’t you love pineapple in the summer? It’s juicy, fresh, delicious, and fairly inexpensive. That is, it’s inexpensive if you buy it at your local grocery store where it’s only a few dollars. Sounds reasonable.

However, you could also buy a luxury pineapple, packaged in an ornate box that unfurls like an origami box and with holes so that the fruit can breathe. The cost of that pineapple is a whopping $396. And that’s if you can find one. The Rubyglow pineapple sold out in the U.S. in only a few weeks after it became available.

While Americans might not be familiar with the idea of luxury fruit, it has a long history in parts of Asia where high-end fruit is often given as gifts. Consumers are willing to pay more for produce that is truly special. And, it’s not just pineapples that have been grown for luxury buyers.

For example, the Crown Melon is grown in Japan and costs $156; it is the single fruit grown on its vine to make it extra sweet. And let’s not forget about luxury strawberries sold in a variety of red, pink, and white berries in boxes. A typical box may contain 30 strawberries, picked when perfectly ripe, with each berry wrapped individually for protection, and costs about $128. And let’s not leave out the Pink Elephant mango from Vietnam. One fruit can weigh up to two pounds at a price of $25 – $95. Unique and delicious.

Shall we eat?

Group Activities and Discussion Questions:

  1. Pricing is a complex topic. Discuss the six steps for pricing (determining objectives, estimating demand, determining cost/profit relationships, select price level, set list price, and make adjustments).
  2. Poll students: How much do they usually spend on fruit?
  3. Show the Rubyglow pineapple order page: https://freshdelmonte.com/rubyglow/
  4. Show video: https://youtu.be/ve8-ddIVVek?si=mIh8aVG2IPAcU8CA
  5. Ikigai luxury fruits: https://ikigaifruits.com/
  6. Discuss the various pricing models in class: demand-oriented, cost-oriented, profit-oriented, and competition-oriented.
  7. For luxury fruit products, divide students into groups and have each group work on any/all of the six steps.
  8. When setting the price level, assign each team a different model to use (demand-oriented, cost- oriented, etc.).
  9. Debrief the exercise. Compare the various pricing models and discuss advantages/disadvantages of each.

Source: Albeck-Ripka, L. (29 June 2024). The world of luxury fruit: Does a $156 melon taste sweeter? New York Times; Wiener-Bronner, D. (19 May 2024). $400 for one pineapple: The rise of luxury fruit. CNN.

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by | Thursday, July 25, 2024 · 7:29 am

Chew on this – Declining Gum Sales

Do you chew gum? The odds are that you probably used to chew gum, but have fallen out of the habit. One reason for the sales decline – Covid-19 lockdowns hit our snacking sales and impulse buys at stores. Gum is one of those products that people tend to pick up at check-out at the last minute. Closed stores equals no sales.

According to research firm Euromonitor, the pandemic hit gum sales hard – global gum sales fell from $19.5 billion in 2019, to $16.1 billion in 2020, and are still low at $19.7 billion. But a new $50 million ad campaign from Mars Wrigley hopes to increase gum sales with a new approach. The campaign will run in 70 countries, with a heavy investment in Europe.

Previously, chewing gums were positioned along the lines of fresh breath and long-lasting taste. But now Mars is taking a new approach – that gum can help with mental wellness by quieting the ‘mouth in your mind’. In other words – a stress reliever. Indeed, some research has shown that chewing gum can help with focus and stress. But will linking gum to wellness work?

Ask me when I’m done chewing.

Group Activities and Discussion Questions:

  1. Poll students about their gum-chewing habits.
  2. List all the gum brands on the board that students can recall.
  3. Why has chewing gum fallen out of favor?
  4. Where is chewing gum in the product life cycle?
  5. Show new ads: https://www.youtube.com/@ExtraOfficialUK
  6. What are student opinions about the ad?
  7. View Mars Wrigley website: https://esp.mars.com/en/made-by-mars/mars-wrigley?language_content_entity=en
  8. Review key aspects of developing a product positioning map, including determining the axis labels for positioning.
  9. Divide students into teams and have each team develop a positioning map for chewing gum. How can gum be re-positioned?

Source:  Deighton, K. (12 June 2024). Gum sales peaked in 2011. Can Mars Wrigley get people chewing again? Wall Street Journal; Mahdawi, A. (14 March 2024). Stressed out? Get chewing. The Guardian.

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by | Wednesday, July 10, 2024 · 8:01 am

Not an ‘Ethnic’ Store, it’s a Grocery Store

How familiar are you with Asian grocery stores? We’re not asking about the ‘ethnic’ food aisles at the neighborhood supermarket, but an entirely different mix of culture, foods, and services that can be found at grocery stores focused on Asian foods and meals.

Growing from tiny mom-and-pop shops in the 1980s, large scale grocery stores such as H Mart, Patel Brothers, and 99 Ranch Market have emerged across the U.S. According to IBISWorld, in the past five years, revenue at ‘ethnic’ supermarkets has grown to $57.6 billion.

They’ve gotten so popular that H Mart, at 96 stores and $2 billion revenue, bought an entire shopping center in San Francisco. Patel Brothers operates in 20 states and 50+ stores, and 99 Ranch has  60+ stores in 11 states. This is not trend behavior, it’s an illustration of the changing demographics and culture across the U.S. as more non-Asian consumers shop at these markets.

Some of the stores also serve as community hubs, food halls, and tea shops. Many now mirror U.S. grocery stores with aisles, signage, and services. But of course, there are foods at these stores that can’t be found at the usual grocery store, including kimchi, frozen dumplings, mochi, different fruits and veggies, meats cut for Korean barbeque, and Chinese cabbages, spices and ingredients. It’s not just Asian foods either. Many stores carry foods for Japanese, Indian and Korean dishes as well. It’s exciting to see and try so many new foods.

Shall we go shopping?

Group Activities and Discussion Questions:

  1. Discuss the evolution of grocery stores and shopping.
  2. Show video about shopping at H Mart: https://youtu.be/W9CVzAl0qN8?si=TV687w5ToIAlCWjn
  3. Show H Mart website: https://www.hmart.com/
  4. Show 99 Ranch Market website: https://www.99ranch.com/
  5. Show Patel Brothers website: https://www.patelbros.com/
  6. For a longer exercise, divide students into teams and have them visit a local American supermarket. They can diagram aisles and take photos of shelves and foods.
  7. If your university has one of these stores in your geography, assign students to go there and do a comparison of these stores versus grocery stores.
  8. What are their observations and conclusions?
  9. Alternatively, have teams develop a marketing plan for the Asian food supermarkets to reach additional shoppers.

Source:  Krishna, P. (11 June 2024). Don’t call it an ‘ethnic’ grocery store. New York Times; Norfleet, N. (16 June 2024). Asian grocers fill void in Twin Cities. Minneapolis Star Tribune.

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