bake - February 2013 - 40

total and 3% higher than expected. “This year’s

search to explore what other bakeries are charging for

optimism is in large part due to an ever-increasing

a dozen gourmet cookies, for instance, packaged in

number of consumers choosing the web over

a special gift tin. Then understand where the oppor-

physical stores and the rise in mobile commerce,”

tunities exist to raise prices depending on seasonal

says Forrester vice president and principal analyst

demand. Don’t be afraid to experiment a bit with price

Sucharita Mulpuru.

points to determine what the market will bear.

Online opportunities

Pricing consultant Raﬁ Mohammed, who wrote The

Online retailing opens the door for dynamic pricing

1% Windfall: How Successful Companies Use Price

because it affords you the opportunity to change

to Proﬁt and Grow, recently told Marketplace.org

prices with ease, based on factors such as demand

that, “What (marketers) are really trying to do is ﬁnd

or time of year. As a basic example, Eleni’s Cookies in

pockets of opportunity, where they can change the

New York City last year offered online shoppers the

price to make the highest proﬁt margin or sell the

chance to buy from its Halloween collection three

most amount of products.”

weeks prior to the holiday at a 20% discount. This
Certainly, retail bakers must tread carefully if and

tactic helped spur momentum early.

when they decide to raise prices. Consumers may
But the real question is how to use dynamic pricing to

respond negatively if you raise prices out of line

push the limits of what you can charge on the upside.

with your competition. Established cake shops can

First, know where your competition is. Do an online

be undercut by competition from home-based cake

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bake - February 2013

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