Draft of my portion of the group paper

Wegmans’ Prices and Advertising – The Customer Appeal
As far as pricing and advertising are concerned, Wegmans is once again a leader in the supermarket industry. Wegmans sells over 60,000 different products and charges some of the lowest prices available for a lot of their products. Much of this is attributed to the fact that more than 700 of those 60,000 products are bought from over 600 farmers local to each Wegmans store (Swibel). This cuts down drastically on shipping costs and therefore creates less expensive products that also help give back to the local community. Wegmans’ reputation for having some of the lowest prices around on day to day goods is also due to the store’s founder’s son and former president of the company, Robert B. Wegman and his incredible abilities as a marketer. Having been born into a family of grocers, Wegman grew accustomed to life in the retail food business. After eventually becoming the company’s president at the age of 31, Wegman began working to create “the finest supermarket chain in the land.” Wegman’s goal was to create the highest quality stores before worrying about mass expansion. He says, “I have never pursued growth for growth’s sake. All we really want from our efforts are the finest food stores anywhere, operated profitably (Burris).”
Mary Ellen Burris, a writer for the Wegmans website, explains the importance of consistent low prices at Wegmans. According to Burris, Wegmans ranked number 1 for lowest prices on national brand foods. Wegmans’ meat and produce were found to be on average 18% lower than other major chains surveyed, however the other chains surveyed weren’t listed. Contrary to Burris’ findings, a personal interview with Colleen Reynolds, a Wegmans employee and customer, proved Wegmans isn’t quite the number one store for the lowest prices. Reynolds said, “Their prices are competitive, but certainly not the lowest.” Colleen explained some of the methods Wegmans utilizes to keep their prices as low as they are. Obviously, the rising costs of food as a result of rising gasoline prices have a negative impact on Wegmans’ prices, however their strategy for maintaining low prices is very efficient, the company’s motto being for “Consistent Low Prices.” Along with buying and selling local produce and meat, Wegmans also strives to sell many of their own store brand products. This method allows the company to charge the absolute minimum cost for many store brand goods they sell, including but not limited to cereals, tissues, paper products, cheeses, apple sauce, milk, and many others. Their store brand products are also very well liked by customers. In fact, in a recent “blind test” where customers were blindfolded and given the Wegmans brand raisin-bran-like cereal and the Post Raisin Bran Cereal, The Wegmans brand Raisin Bran was voted the better cereal unanimously. Wegmans also maintains low prices by keeping their profits to a mere 2 cents per dollar.
However, there are also many products carried by Wegmans that are incredibly expensive, such as black truffles that cost $500 per pound. The main reason these types of products are so costly is that they are specialty products, not regularly harvested by farmers and some even found in the wild. Wegmans tries to offer everything they possibly can to customers, and therefore carry some exotic and expensive products, though still making no more profit than they would off any other product. An article in the Philadelphia City Paper stated that many of their prepared dishes are quite expensive, but customers agree that the quality is some of the best there is (Wyman). Carolyn Wyman of the Philadelphia City Paper also said that although many prices are high, the most common every day products maintain consistent low prices, such as Tropicana orange juice and Breyers ice cream are always 2 dollars, and Dannon yogurt 40 cents. Though they aren’t the lowest prices out there, Wegmans’ definitely provide the best value in terms of price and quality.
As an advertising business, Wegmans has taken an approach that is not very typical of large chain stores. Rather than spend tons of money getting the Wegmans name out and in everybody’s face, Wegmans allows its reputation to “speak for itself,” in the words of Colleen Reynolds. Outside of the store itself, Wegmans gives the members of the local community an image of community, and puts itself in its customers’ shoes. When a new Wegmans store would open, everybody in the nearby area received a booklet of coupons for the store in the mail. Wegmans also sends out weekly newspaper circulations with coupons for customers as well. The television advertisements run by Wegmans are few, but each one highlights their vending of local produce and meat. Wegmans also puts its name in the community by sponsoring local schools. For example, Wegmans sponsors advertisements in many school musical programs (Reynolds). When asked about what is most appealing about Wegmans, Colleen replied, “Definitely the customer service.” This highlights a very important point about Wegmans’ appeal to the community. A lot of bad connotations come with large chain stores coming in to small towns, however Wegmans’ reputation makes it more welcome than most. Each employee hired by Wegmans is required to take a week long training course that teaches them how to treat and help each customer. Wegmans employs not only cashiers and shelf stockers, but chefs, butchers, and cooking instructors as well. This unique aspect of Wegmans creates a very appealing image, as one is more likely to buy food if they know how to cook it. Carolyn Wyman writes, “I watched openmouthed as a butcher escorted a customer halfway across the store to the catering area where she needed to be, conversing pleasantly all the while. The coffee bar barista talked about the 53-cent coffee refill policy as she poured. One customer got a 46-page Meat Basics booklet along with her pork purchase.” Wegmans not only gives their customers quality products, but it also provides high quality and knowledgeable customer service.Wegmans also creates its strong appeal through its appearance within the store. Radley Balko, a writer for the CATO institute, writes, “Upon entering [Wegmans], you'll feel a little as if you've stumbled into an open-air European market. Commerce bustles all around you. It has all the fresh goods, delightful smells, and vivacious colors of an ageless community market.” Balko was very impressed with the way Wegmans presented itself on the inside. In addition to the atmosphere created by the scenery, Wegmans has several features no other grocery stores have. Each Wegmans has several small cafés and food bars that offer prepared foods of several different kinds, including Asian, fruit, salad, pizza, cappuccino, and more. In the store’s wide aisles, chefs give cooking demonstrations several times a day and often give out free samples and booklets as well. Each store has a bakery and a patisserie, offering some of the finest baked goods and desserts. The store even has a wine tasting room. All of these incredible services on top of the 60,000 different products to choose from give customers unlimited options while shopping and the ability to lead happy healthy lives while preparing the highest quality foods.

Annotated Bibliography

Reynolds, Colleen. Personal interview. 24 Apr. 2008.
My interview with Colleen was probably my most valuable piece of information. Colleen described her job as an employee at Wegmans and we discussed how the way Wegmans employees are trained to treat customers is a leading reason for the high appeal Wegmans has. Colleen shared with me her employee publication as well as coupons that came with it. She discussed Wegmans’ pricing methods and how they stay consistent. She also shared with me valuable information about their advertising methods that otherwise I would not have known, as a lot of it is not out in the general media.

Proposal

Wegmans is probably the biggest name in grocery stores in the northeastern United States. It maintains several very large stores and is ranked in the top 5 best places to get a job in America today. One of the ways Wegmans manages to operate so well is its ability to keep such low prices on the goods it sells. My proposal is to find out what methods Wegmans uses to maintain such low prices and also find out how they market themselves to the public. According to the Wegmans website, a Washington Post survey ranked them number 1 for the lowest prices on national brand foods, and also their meat, produce, and nonperishable foods were 17 to 19% cheaper on average. However, the website does not explain exactly how they keep their prices so low. Does Wegmans outsource for any of their products? Are any products made in sweatshops? Or is it just sheer bulk and high quantity and variety that allows Wegmans to charge less than any other store? Also, what is their marketing strategy? Where and how does Wegmans advertise? What mediums do they use for advertising?

Keeping prices low… but how?

Wegmans food markets advertise some of the best prices you can find on all the 60,000 products they sell. Mary Ellen Burris writes in a column on Wegmans’ website that Wegmans researches and strives for the lowest prices they can. When a customer comes to them with a lower price they found somewhere else, Wegmans will research the matter and find a way to make their own price even lower. Of course, an article straight from the Wegmans website would give such positive information. Some research into why such large markets can keep such low prices showed some shocking results. An article on a website called Trees and Things explains the story of Deborah Shank, a 52 year old employee at Wal Mart who was hit by a truck driver and had to be payed for damages. Now as everyone knows, Wal Mart has the lowest prices on just about everything they sell. The Trees and Things article explains that Mrs. Shank’s employer pulled a legal card that reduced the money she would receive form $700,000 to about $400,000 and forced her to pay that money to Wal Mart. “Wal-Mart claimed it had the right to take any money its employees receive in a judgment or settlement to reimburse the company for their expenses in caring for the injured worker.” Mrs. Shank ended up being declared mentally incompetent, from brain damage due to the accident, and was placed in a nursing home. Thinking about how large Wal Mart is in America and how many employees it has, there are probably TONS of cases like this one where Wal Mart took money from its employees per their insurance policy. It is possible that the income Wal Mart makes off of taking insurance money from employees can explain a lot about Wal Mart’s prices being so low. One can only wonder what other means large markets like Wal Mart and Wegmans use to get more money and lower their prices.