Option 1 can be eliminated since this option will not let Hi-Value stay competitive in the market. This won’t improve position, image, or sales. Hi-Value will lose market share and sales due to price differentials. Sales for the first quarter of 2003 was 3% below its budgeted level. There is an increasing price consciousness among customers and Hi-Value will do nothing to help ease customers. For Option 2, lowering prices all across the board will make a great impact on the shoppers. Meat which is important to customers is covered in this option. Cutting prices all across the board will reduce inventory and handling cost. The downfall to this option includes Hi-Value’s image changing into not as high of a premium position. Direct competition will be fiercer since all prices would be closer to the …show more content…
The only two categories which have enough volume and high enough profit margin are grocery and produce. Approximately 57% of Hi-Value’s sales and low prices will convey the image we want to project. Refer to Attachment 9 where the percentage increase for grocery and produce are both 28.63%.We will gain a bigger market share if Hi-Value implements this option. This options shows we are reacting to the growing price consciousness in the area yet are still looking out for ourselves as a business. Price knowledge among shoppers is category dependent. This option will hopefully prevent the recent decline in sales and increase competitiveness overall. However, this option portrays a lack of cohesiveness which could be odd to the consumer. As well, additional advertising expenses will be needed in order to support this option. All financial objectives are met: increased market share, increased consumer margin, and increased sales revenue. Refer to Attachment 9 to see these numbers. The brand image will no longer be in question. Price sensitive customers would be