Company Case Trader Joe\'s: Cheap Gourmet-Putting a Special Twist on the Price-V

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Company Case Trader Joe's: Cheap Gourmet-Putting a Special Twist on the Price-Value Equation Apple Store openings aren't the only place where iong lines day: Shoppers bustle and buzz anid cedar-plank-lined walls palm trees as a ship's bell rings out occasionally at gathered, eagorty awaiting the opening of a Trader Joe's out checkout, alerting thom to special announcements. Unfailingly post. The waiting shoppers discuss all things cluding their favorite items. One customer suggests the chain ers about everything from the weather to menu wll be good for the neighborhood even though there are already dinner parties. Customers Trader Joe's, in helpful and cheery associates in aloha shirts chat with custom- of grocery stores around, induding various upscale food experience it. Shelves bristle with an eclectic assortment of gourmet quality Califomia-based Trader Joe's opens a new store-something that only happons a handful of times each year. Within mo-an average supermarket ments of a new opening a deluge of customers makes it most impossible to navigato the alskos. They This is a scene that plays out every time the Southem grocery items. Trader Joe's stocks only a imited assortment of und in supermarket). However, the assortment is uniquely Trader Joe's, including special concoctions of gourmet pack- line up 10 deep at aged foods and sauces, ready-to-eat soups, fresh and frozen free of artificial colors, tavors, about 4,000 products (oomparod with the 45,000 items Trader Joe's exclusive $2.99 Charles entroes, snacks, and desserts-all Two-Buck Chuck"-and an assortment of and preservatives exclusive gourmet products at impossibly low prices. Amid hanging plastic lobsters and hand-painted signs, a Hawalian shirt-clad manager (the "captain) and employees (the crew) reamy Valencia peanut butter explain to first timers that the prices are not grand opening chile tomato-less organic broccoli slaw, organic strawberry lemonade and fair-trade coffees to com and Trader Joe's sells various items that are comparable to other stores. almond mik, extra puip orange juice. s to smoked gouda cheese, and roasted garlic hummus. But the salsa and triple-ginger ginger snops. What is it about Trader Joe's that has consumers everywhere lkeorganic varila yogurt walting wah suchau ring the perlect quirky rotaler albo maintans pricing power by seling things that have cracked the austomer value code by proiding the perlectare uniqunly Trader Joe's. Try tinding Ginger Cats anxious anticipation? Trader Joe's seen blend of benefts to prices noa and black bean tortilla chips,or mango coconut popcom at any other store High on Benefits Trader Joe's isn't really a gourmet food store. Then again, it's More than 80 poront ot tro stoo's brands an proteabel gods, sok,acuskoly by Trokr kei it asked, arrest any America's hottost retalers, Trader Joe's has put its own special customer can tick oft a ready lst of Trader Joe's favortos that they just can't lve wihout-a ist that quckly grows. Paople go food stre other it's actuly a tit of both. One of twist on the food price-value equation-call it 'cheop gourmet It offors a into tho store rbnng to buy a fow ?ones and quickly ??"mint calber, cned a kind proacts at targan

Explanation / Answer

10-18. The customer value-based pricing is primarily based strategy of price fixing without the historical prices of the product taken into account. It is not a kind of exclusive pricing strategy.

Here in the case of Trader Joe's company which sets the price based on the market product mix strategy. The prices of the product are not so high as well as not so low. It is primarily based on the what customers can afford and pay additionally when the values are enhanced with the product. They offer the product with low cost in the market. Customers keep eye on the new stores of the Trader Joe where they can specialty products too. Hence, they wait for the opening of new stores. This shows that the products offered by the company have value. The product offered by the company are at low price but for Trader Joe offers value added products specially in food items to their customers which they are ready to pay.

Hence the company is more successful.

10-19. Good value Pricing is the pricing strategy which combines price and quality of the product at fair price. It discussed the delivered value of the product with its price.

Value added pricing strategy is the strategy which adds value to the product or services and thus the price of the product rises. They are used in order to increase the sales with the loyal customers.

Here in this case, Good Value Pricing strategy is used because the Trader Joe offers the product at the low price than its competitors in the market. So, it is possible mainly when the quality or value of the product is compromised. Whenever the value of the product is added then the additional charges has to bear by the customers. But the company offers every product at low price which definitely means that the value is given to the customers as per the price of the product.

10-20. Yes, the Trader Joe’s pricing strategy truly differentiate it from the competition. The reason behind is that the company offers all of the products at low price. This means that most of the company offers prices higher or slightly lower than its competitors. Hence there is no company which offers the prices lower than the Trader Joe. Hence, there is no competitor in pricing strategy of the company.

10-21. Yes, Trader Joe pricing strategy sustainable because the keeps the pricing low on the basis of various factors such as lean operations, financial focus on saving money etc. They keep their stores on low rent areas or out of the structure. The sustainability comes when we retain on their same position for long so the company is trying to keep track on the same low pricing strategy. They keep on putting efforts to reduce the pricing of the company products from cutting or reducing other expenses. Although it is tough process but can be achievable.

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