I found the following which is very UK centric.
The way that "the big boys" work out how to price their goods. I don't intend to get into the relative quality or environmental credentials of those goods - there are plenty of places that will teach you to weave yoghurt. This is "Bargain Hunting 101". Okay?
Now my credentials - I have been involved at a strategic level for five top UK Retailers. I have even automated and trained this stuff. It’s not rocket science but there are a number of logical steps that retailers follow. In understanding them and what they mean you equip yourself to best exploit them to whatever your own ends are.
Lost Leaders and KVIs.
All Retailers have them
They both revolve around the logic of the "KVI". Known Value Item.
Within a customers normal shopping (weekly basket) there are a few items that are so regularly purchased that the customer is aware of the "market price" for the item. These are known as KVI (Known Value Items). These are sold in two ways. Normal KVIs virtualy have a "price fixing agreement" (which is illegal and known as a "cartel"). In effect everyone fixes their price to the "market price" so there is no advantage in going to a "cheap shop" for them. Buy Local. In a pharmacy this is basic paracetamol. Lem-sip. You get the idea. How much is an elastic support for a knee injury? You will have no idea - you have never bought one. So that's where the money is and that's what they charge.
Lost Leaders. These KVIs are sold below cost. The theory is that if you understand that the supermarket is cheap on these items - mind blowingly cheap - you assume they are cheap on everything. So you shop there. These items are regularly purchased low value items as a rule. Tins of "value" beans, basic sliced bread, butter, etc. You CANNOT make a load of beans in tomato sauce for the price of "Tesco Value" baked beans. Tesco can't make them that cheap either.
So don't be afraid to buy just "Lost Leaders" from the supermarket. But KVIs wherever it is cheapest to get to - an out of town trip is pointless.
Next will be "Good, Better, Best" If that’s of interest?
Right next one is "good, better, best". This is a standard pricing policy now but was introduced by Supermarkets. Indeed the first to do so, and possibly still the best emotionally branded, is Tesco. They consciously brand their own products (but also position branded products) into three price bands
Good = Cheap (Blue and white striped labels badged as "Tesco Basics", generally no pictures, minimal packaging)
Better = Run of the Mill (Some pictures, just "Tesco" in the name, medium price point)
Best = Premium (Lots of pictures, sold as "Tesco Finest", high price point)
Do NOT confuse packaging with product. Generally there is a price and ingredient differential but for say, Sugar, who cares? There is an enormous difference in price in these ranges. Some contain identical products. Some do not. Read the labels!!!! All will tell you exactly what they contain. Blind taste them. Make value based judgements and do not "shop with your eyes", shop with your brain!!
When we have gone through the basic rules of pricing, I'll explain more about why these things are the way the are, but for now, learn to look at ingredients, not packaging. There is a difference for sure in most products - but is it enough?
Do not expect by the way that branded goods will cost the most. Generally "Finest" or "Best" or "Taste the Difference" are priced as high premium brands - so more than say, Heinz or Bowyers
Remember guys and girls.. eye level is buy level. The items that make the most profit are usually at eye level, the cheaper alternatives are often way down by the floor. To illustrate this, look at the wine aisles. The £3 gluggers are down on the floor and all the £5 to £8 wines are in the middle. If you want the £9 and above stuff, it's up on the higher shelves. So the wines that make a reasonable profit and that sell in volume are just within arms reach. One area where this doesn't apply is to confectionary, things that are brightly coloured to attract children are placed low down within reach of a child, but the adult chocolate is placed higher up.. Organics are another area where the stores use their science, for example they won't put organic apples next to regular apples, because people will compare the price and take the cheaper option. There must be hundreds of other little tricks, I'm sure there are books written about it..
Personally, I go in with a list and follow it to the letter. This way I don't fall for the tricks and land up spending more than I planned. It's the shoppers who are lead by the displays and offers that land up spending more. How many times have you heard somebody say 'I only went in for cat food and I came out with a trolley load and it cost me £30...
Did you know that most stores now work to defined planograms and the "premium spots " (eye level as you say in many aisles) are "sold" to manufacturers to command a better price (in the manufacturers eyes if they can sell more at a lower margin its a good thing. Product density (how many "facings" of a product there are) is generally driven by turnover, although there are many other factors that influence this.
As you say there are many examples of targetting children - its known as "pester power" - e.g. sweets at the checkout where the child has to sit bored.
You will also notice the "menu merchandising" more and more these days. This involves putting nan bread with the curry sauce as well as the bread aisle - to encourage you to buy it.
Right, next tip - MSP. This stands for "Manufacturer Supported Promotion". In effect a manufacturer wants to raise the profile of a product and gives the supermarkt a price break to do it. This will often encompass "buy x (e.g. shampoo) and get y (conditioner) free". These offers are genuine and represent a large saving - but only if they are products you use anyway. MSPs arer usually accompanied by advertising - in store and even on TV but will usually apply to branded products so may not represent a saving against "basics" products
Next thought - avoiding temptation. Supermarkets are great at tempting. They employ teams of people to increase your ATV (average transaction value) and carefully calculate their "share of spend". Its a competition. You actually don't mind where you spend your money provided you get the goods you want. What you need to avoid is being tempted to buy things you dont need.
Retail strategies include:
1) Promotions (incentives to buy) - including discounts (10% off), thresholds (three for two, 5% off a case of wine), multi-buy (pack of beans cheaper than the same number of cans), linked sell (buy the curry get the Naan bread half price) etc.
2) Messaging - you aren't a caring parent unless... (developmental toys, helps promote strong bones), Self indulgence (because your worth it, not just food, M&S food), Lifestyle (sports stars using a brand of razor), Emotional blackmail (water given to third world countries when you buy.....computers for schools....)
3)Loyalty - Points make prizes, cheaper petrol when you spend....etc.
4) Subliminal (blowing the smell of bread baking into the store, pictures of happy families consuming....., even certain songs (in the summertime increases sales of BBQ food)
How do you combat this? By planning
A) NEVER shop hungry. You will buy loads of junk. Eat even a bowl of cereal before you go.
B) PLAN your purchases - meal plans, buy what you use and use what you buy
C )LIST your shopping - people used to because money was tight
D)SHOP ONLINE - it can cost as little as £2.50 or even be free. You are far less susceptible to a lot of tempting offers and can indeed shop from your "favourites". When you factor in transport costs etc. It’s usually cheaper. However do it less frequently and really stock up on heavy, bulky and awkward items
E) USE the promotions when they suit you - buy plenty when things you buy anyway are cheap
F) STORE. Having plenty of your normal staples lets you not have to make a "distress purchase" which is usually more expensive on ticket price, transport cost etc
G) BUDGET for luxuries. We all need them but set a cost limit. Then decide what to spend it on this month. Takeaway or wine? Sweets OR crisps etc.
