Saturday, November 10, 2007

Dear Kroger

I’m afraid that the new marketing intern you tasked with organizing your store promotions this week doesn’t quite grasp the concept of “loss leader.” Or maybe I don’t, but then I have never fancied myself as MBA material. I thought that a loss leader was a product—usually one that is a basic commodity and much in demand—which you offer at a low price, even below cost, in the hope that the consumer who comes in to take advantage of the savings will then buy lots of other items in your store at your usual inflated price.

Milk is a good candidate (especially now that milk and gas are running neck and neck) and the good citizens of Grosse Pointe were surely delighted to see your sale fliers this week in which you touted milk at “3 half-gallons for $5”. I ran out of milk on Friday, so I made an early morning run to the store. But just as I was about to grab my “bargain”, I noticed the price on the gallon jug. $3.29. Three half gallon at $5 works out to $1.66 per half gallon, or $3.32 per gallon. Do the math. It’s a great MEAP question—real-life solutions for real-life problems.

I keep re-checking the figures and I am getting a headache. I need to relax with a glass of milk and some cookies. Got any cookies on sale this week?

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