Price Not The Biggest Factor In Buying Decision
I read with great interest a recent report done by The Hartman Group (www.hartman-group.com) that indicates that contrary to what many marketers in the gourmet food industry would intuitively believe, price is not the most important factor when purchasing gourmet foods. In fact, as part of its study, “The New Value Paradigm: Theatrics of Thrift,” the Bellevue, Wash.-based market research company asked consumers to rank 25 different statements about gourmet food products. “It works well/tastes good,” came in No. 1, followed by concerns about waste, such as “Will this product actually be consumed in its entirety by my family?” Interestingly enough, “Price” only came ins the sixth most important purchasing criterion.
While a great deal has been written about how consumers are “watching their pennies” in this economic downturn, it does not necessarily mean that they are willing to compromise quality and / or value for a lower price. Most consumers of specialty foods would tend to agree that a purchase with a great (low) price that ultimately turns out to be disappointing when it is served is really not a deal at all.
This Isn’t Really A Revelation When You Think About It
Quite honestly, this is not really news to me. It only stands to reason that a product whose primary feature is a low price point (at the expense of everything else) is likely not a “good value” proposition. If you decide to purchase a lesser-priced gourmet food, only to get home and be disappointed with its taste profile, you’ll likely regret ever buying it in the first place. Such a purchase would certainly not qualify as “good value” under any definition.
“Value” is a Balance of Price and Relative Quality
One of the factors on which we base our decision to carry a product or not is its price - quality ratio. If an item’s cost is comparatively low vis-a-vis similar quality items, we are inclined to consider it for our clients, as it represents excellent value. Conversely, the if price of a given item is high relative to other competitive offerings available in the market, we are unlikely to add it to our ever-growing portfolio of gourmet foods. Obviously, there are a myriad of other factors that we consider when listing any new gourmet foods, but price is quite far down the list.
“Good Value” Doesn’t Necessarily Mean “Inexpensive”
Some of the more expensive items that we carry are “excellent value” but are certainly not the least expensive products available in their category. Two examples of this are the Prospero line of gourmet Salsas and the pasta culinario line of wine-based, gourmet pastas and pasta sauces. Neither of these would be considered inexpensive (they are in the mid-to-high price range) but we have learned over the years that our customers are not necessarily looking for the least expensive alternative. The old adage of “you get what you pay for” is true for most products and gourmet foods are no exception.
No Plans To Change Our Product Selection Process Due To Economy
While there can be no doubt that consumers everywhere are spending their hard-earned money very carefully, even this recession, our Sales patterns show us that our customers want value for their money above all else. The N.A.S.F.T. (National Association for the Specialty Food Trade, www.specialtyfood.com) defines gourmet and specialty foods in the following manner:
“Specialty food products shall mean foods, beverages or confections meant for human use that are of the highest grade, style and/or quality in their category. Their specialty nature derives from a combination of some or all of the following qualities: their uniqueness, exotic origin, particular processing, design, limited supply, unusual application or use, extraordinary packaging or channel of distribution/sale, the common denominator of which is their unusually high quality.”
You will note that the price of specialty foods is not even mentioned in this description. Generally speaking, our gourmet food clients who are seeking specialty items (such as pasta sauces and salsas) want excellent quality above all else. The value proposition, however, remains a very important influence in the buying decision.
Greg Sprout, Co-Founder,