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Why you need a price book

April 29th, 2007 at 02:56 am

From the files of "come to think of it, they should have something like this", an article about price optimization software:

http://seattletimes.nwsource.com/html/businesstechnology/2003684689_price28.html

The takeaway message that I get from this is that there is an art to pricing, based on psychology. There is a fair amount back and forth on other frugal sites. Some people, like me, swear by a price book, which is a list of prices, per unit, of items I normally buy, at the store I bought 'em at, and the full date (including year) when I encountered the price. Other people tell me that they have great memories, and they know for a fact that one store had consistently lower prices for stuff so why waste time and effort?

This article strengthens my suspicions that price optimization software really target how shoppers perceive price and value, especially for those shoppers who rely on their memory and impressions. In other words, those who fly by/buy the seat of their pants. A store will specifically target their loss leaders to give shoppers the impression that they have consistently lower prices, yet after a few months...not so much.

Besides, the store is using the most sophisticated calculations imaginable to determine their price. The willingness to maintain and use a price book (and if necessary, not buy) at least shows the shenanigans.

It was amazing to me learning my first week of pricebooking that Larry's Market, not known for cheap prices, beat out Costco's price for canned tuna...handily. And best of all, I could buy exactly the number of cans I had the budget for, not in packs of 12.

So you just never know ... unless you have a price book.

Changing the subject, I added another paragraph to the blog entry How To Store Grocery Produce. I think it's a good tip, making the entry worthy of revisiting.

2 Responses to “Why you need a price book”

  1. Joan.of.the.Arch Says:
    1177824273

    My spouse does most of the grocery shopping now, so I have gotten out of touch with prices. At one time I knew prices vary thoroughly. I also used to take a long time to shop because I was forever calculating the unit prices and lable reading. If I were to take on the shopping task again, I think I'd need to start with a price book for a few weeks (months?) until I had it in my head again.

    We are Costco shoppers, but there are only a few things that we buy there. It is quite clear that these things save us money, even when taking into account the membership fee. I don't buy other things that I had not intended to buy because I hate being in that store, so I leave as soon as I grab what I came in for. I guess when we first started shopping there we tried a few different products that we had not come with the intention of buying. But now we have a purchasing routine. Speaking of tuna, that is one item we buy there because the quality is better than we see anywhere else regardless of price.

  2. contrary1 Says:
    1177893995

    I'm not the shopper for our household either.........nor do I pay for any of the groceries...so I've got a pretty good deal. I have encouraged frugal shopping however.

    One thing I do, beyond knowing a good price, is a trick I picked up from my dad. When I'm going to open something from the pantry, or paper type supplies.........I write the date I open it on the package. I have learned how long something lasts me this way, so then I can calculate how much something costs per month/year. Obviously, this only works on items that sit on your shelf, that you use from periodically.

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