While Canadian Thanksgiving is behind us, Americans still have their turkey dinner to look forward to. In Catherine Rampell’s blog with the New York Times, she discusses the uniqueness of the pricing of turkey. Furthermore, she compares the prices of frozen turkeys across the whole year, looking into why exactly frozen turkeys are the cheapest around both Canadian and American Thanksgiving—when there’s the highest demand for turkey.

Rampell briefly touches on the pricing of fresh (not frozen) turkeys, but because they don’t have nearly as long of a shelf/storage life as frozen turkeys, pricing is nearly inelastic. For that matter, she mainly discusses the pricing of frozen turkeys.

In determining pricing of a product, we’ve learned in class that it essentially boils down to 5 main components: company objectives, customers, competition, costs, and channel members. Using what I’ve learned through marketing, I believe the competition and customer aspects of the 5 Cs of pricing are what create a dip in frozen turkey prices during Thanksgiving.

Due to the lack of differentiation between frozen turkeys from different suppliers, competition is high. Due to this high competition, prices are driven down as each firm attempts to capture the most of the turkey market. At Thanksgiving in particular, demand for turkey is substantially higher than the rest of the year, but prices still remain low.

With lower margins, suppliers of frozen turkeys then must become sales oriented: they want to maximize volume of sales. This increase in volume of sales helps to make up for the lack of profit in frozen turkeys around thanksgiving.

When looked at from a marketing perspective, the drop in prices of frozen turkeys can be explained using some of the 5 Cs of Pricing.

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Until the late seventies, the sport of skiing was only performed facing forward—obviously so that you can see where you’re going. It wasn’t until the mid seventies however that Olin Mark introduced the first twin-tip ski: the Comp IV. This ski separated itself from the competition because you could now ski forwards and backwards down the hill. While Olin Mark introduced twin-tip skis, this new product didn’t catch on until 1997 when Salomon introduced its first twin-tip ski: the 1080.

Once snowboarding started to catch on around the world, skiing began to lose popularity, especially in younger generations. Consumers were turning to snowboarding because of its unique ability to ‘surf on snow’, and to do freestyle tricks—something that skiing at the time could barely offer. In order to combat this snowboarding revolution, Salomon took the existing market of skiing and introduced a new product that had failed in the past—the twin-tip ski. With this new product, adrenaline-seeking consumers at ski hills could now choose between skiing and snowboarding to get their fix.

Introducing this new product helped to maximize customers in this market because freestyle skiing did not cannibalize the sales of Salomon’s snowboards. If consumers already loved skiing and wanted to try a new product, they’d try the 1080. Not a snowboard.

Under the trusted Salomon name, this product did not fail as it had with Olin Mark. Brand loyalty kept the product afloat, and allowed the small market share this product created to snowball into an entire industry. In today’s market, there are countless brands entering the freestyle skiing market, all of which are in debt to the original Salomon 1080.

http://www.salomon.com/caus/activity/alpine-skiing.html

http://www.b2i.us/profiles/investor/fullpage.asp?BzID=1548&to=cp&Nav=0&LangID=1&s=0&ID=6661

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