Perishable products are those that expire or decrease in quality or value over time. Such products impact the way businesses and marketers operate across all four elements of the marketing mix. Distributing, pricing and promoting perishable goods presents distinct challenges compared to goods that endure.
The distribution process and availability of goods are integral in the marketing mix. Fresh produce serves as a primary example of perishable products in a grocery industry. Companies often have to pay more for climate-controlled transportation or timely delivery of produce. Also, a business must get perishable items from manufacturer or wholesaler to the retailer location as quickly as possible to ensure ample merchandising time before expiration. In some cases, companies distribute perishable items like dairy and meats directly to consumers through door-to-door distribution to avoid having them sit around.
Product pricing and promotion are essential elements of marketing strategy that go hand-in-hand when building a strategy to market perishable goods. When pricing perishable items, company leaders must plan for expected customer demand. In competitive industries, setting prices too high initially may lead to excess supply as time goes on. Using data analysis and predictive pricing models helps guard against purchasing too much or setting prices too high. These software-based models allow companies to evaluate how much particular items have sold at various price points and times in the past.
Advertising and Promotional Discounts
Effective advertising and in-store merchandising displays are important to drive demand that leads to sell-through on perishable items. Moving aging items to the front-end of a store helps call attention to them, for example. When a business doesn't sell-through perishable items quickly, it must discount them to guard against spoilage. Waste or spoilage is a huge burden on retailer profit. Even selling items at steep markdowns to generate cash is better than throwing out hundreds or thousands of dollars worth of expired or rotted merchandise.
An alternative to steep discounts is donating perishable items to nonprofits prior to expiration. This strategy allows a business to claim a charitable expense when filing taxes, and it helps build a favorable image in the community.