Market Based Pricing

I have been purchasing Girl Scout cookies for almost as long as I have worked in marketing research. So last week when a friend told me her daughter was selling the cookies, I placed my order for six boxes – at $4.00 a box. Like many people, I grumbled that the prices keep increasing and the package sizes keep decreasing. But that was about the end of my snit. Then I happened to mention the cookies to a friend of mine in Colorado. I was shocked to discover Girl Scout cookies sell for $3.25 in Colorado.

Yes that is correct - the Girl Scouts have adopted market based pricing. So like most other products and services, Californians pay a premium to buy the cookies. I am still a bit surprised by this, but I also admire their marketing savviness. After some exploring, I discovered this is a $700 million annual business. This brand has rapidly embraced many new forms of marketing, such as E-vites , YouTube and Facebook . And because the economy is hurting their sales this year, they are using one of the strongest marketing tactics possible – nostalgia (while reducing the average box size by one ounce).

They must be doing something right. While sales are down close to 20% in some parts of the country, they are running 9% ahead of last year in Northern California.

How much did you pay for cookies this year?