Question

1. In some countries, bananas sold under the 'Dole' brand name are available on convenience store counters where people pay for their shopping. Such stores also sell products such as chocolate bars, snacks, convenience meals and so on. The bananas are clearly branded with a Dole sticker and they are presented in a box that is also branded Dole. The bananas do not come in any other packaging than their natural skin. The price of each banana is 3 times that of an equivalent banana when bought in a supermarket as part of a bunch. However, the Dole box tells customers that if they buy 2 bananas, they will receive a discount of 20%. a) Identify and explain the link between this case and marketing concepts of your choice. (15 marks) Discuss the advantages and disadvantages to Dole from this move. b) (10 marks)

Answer 1

1(a)The case highlights the “Premium Pricing” strategy the firm is applying. The bananas sold under “Dole” brand in a box signifies attracting customers on the basis of superior packaging and premium pricing. Th idea behind selling a banana using a brand name is to trick customers into believing that these bananas are somehow different and superior in quality, size, and nutritional value than bananas sold in a supermarket.
Companies take advantage by premium pricing when they are confident about their brand value and a customer segment that can pay a little higher. However, buy offering a discount of 20% on buying 2 products for a premium priced product, the firm is tying to attract those customers who are impressed with the Dole brand but somehow think they cannot afford it. A discount offer makes them believe that they can afford the brand’s product which they had desired for so long.
(b)The advantages of this move for “Dole” is it will earn a higher profit margin. The competitors in the segment will find it difficult to make a move because of premium pricing. The branding helps create a loyal niche customer base that equate brand with quality and vice versa and is always ready to pay a premium price.

Disadvantages of this move is that the category of consumers who like to shop at supermarket will never purchase from “Dole” brand. The move to sell “Dole branded bananas” somehow sends a signal that the brand is off-limit for budget customers. Subsequently, all products of Dole might be perceived as expensive and premium.