May 2024 - 20

MANAGEMENT
is how well something does its job.
Butterfly weed (Asclepius) is great for
attracting pollinators - it has high
functional value compared to many
other plants. Maple trees (Acer) make
great shade. Conditional value is the
symbolism or meaning of a product;
for example, red roses represent love
to most of us. Social value is how
the product makes us look from the
perspective of others who are socially
important to us. If our friends have
succulents in their apartments, we
can look cool if we do, too. Epistemic
value is the novelty or sensory value. Is
it a new color of carrot? Is it a fragrant
plant? If yes, then it has higher
epistemic value.
Last is emotional value. There is
plenty of research showing the positive
feelings that plants can help us have
and the stress that plants can help
mitigate. Yet when some retailers set
prices, they don't think about all these
components of perceived value. All of
the dimensions of perceived value can't
be calculated in cost accounting but are
extremely important in setting a price.
Savvy marketers know people
buy benefits, not features or
characteristics. Consider the perceived
value of an item. If it's new or novel,
experiment with the upper limit of
pricing. Set a relatively high price for
those new, novel or limited-inventory
items. A good P.O.S. system makes it
easy to reduce the price of an item
without putting it on sale. Experiment
with a few products every year. If you
sell out too quickly, it was probably
priced too low at the start.
It is much easier to raise prices on
W&W in Hudsonville, Michigan,
has a great sign that shows the
benefits of assorted succulents.
Notice there is no price, which
can bring customers in closer for
a better look; large price fonts
enable customers to say " no "
from a greater distance.
products that are easily perceived as
being different. This is one of my big
concerns with pricing all container
sizes at the same price point. We
are giving up the perceived value
dimensions and the real product
benefits - and telling the consumer
that the value lies only below the rim of
the container. While it makes life easier
for labor, profits are compromised if
everything is priced by container size.
Product Differentiation
Third, consider product differentiation
as a way to increase perceived value.
Charlie Hall, Marco Palma and I
conducted a pricing study several years
ago. With the assistance of some highcaliper
retailers, we devised a study to
examine price elasticity or, more simply:
How much does demand rise or fall
when we decrease or increase prices?
We had them go against convention
and, rather than decrease prices over
this selling period, increase prices over a
four-week selling period.
We conducted the study on a range
of plants, including roses, annuals,
perennials, shrubs, and vegetable
and herb transplants. We had a great
deal of data to examine the impact
of this price increase, particularly
when we knew that the prices of other
products - or at least the perception
of the prices of other products - was
going to be going down over the study
period. What were the results?
The good news was that when we
raised prices by 10% per week, despite
selling 8.27% fewer units, total revenue
was up 2.3%. That is, even though we
sold fewer units, the price increase
enabled the retailers to sell about 2.3%
more in terms of overall revenue. We
increased revenue even though we
decreased the number of units.
Communicating Price
Fourth, consider how to
communicate price. After outlining
the five dimensions of value, retailers
should be able to see that consumers
buy benefits, not features. They place
greater value on products that they
perceive have higher value. But what
piece of information commands the
most attention on retail signs? Price.
In some recent research conducted at
Michigan State University, we showed
that consumers physiologically see
prices faster when they are on the
left compared to the right side of the
sign or display. One reason for this is
because we read from left to right. (See
the March issue or visit lgrmag.com/
article/revampsignage for more.)
We were also able to show that
higher prices are seen faster compared
to lower and moderate prices. That
high price cue literally commands
people to look at it! However, in
a separate study, we showed that
Petals from the Past in Jemison,
Alabama, has a BOGO sign. This type
of sale will move more units than
50% off, which is the same price.
20 | LAWN & GARDEN RETAILER | MAY 2024
http://www.lgrmag.com/article/revampsignage
May 2024

Table of Contents for the Digital Edition of May 2024
