Department of Animal Science
Date of this Version
December 1993
Abstract
When determining the purchasing behavior of today's consumer, one should realize that price is but one factor in the buying decision. This tenet applies to meat producers, packers, and retailers alike, many of whom are beginning to look at the definition of price in a different way. There are, in fact, two ways of looking at price: from the "inside out" and the "outside in". When pricing is determined by the "inside out" method, the emphasis is on recovering the initial production costs and the addition to those costs to generate a profit. The "outside in" approach to pricing, however, is driven by demand and attempts to determine customer perception of value. The meat industry is faced with a challenge in this respect: consumers may perceive meat as having an equal, or even lower, value than chicken and consequently feel meat is overpriced. Hence, the question to the meat industry centers around priorities: Do we lower our price? Or do we improve the value of the product?
Comments
Published for Proceedings, The Range Beef Cow Symposium XIII December 6, 7, & 8, 1993, Cheyenne, WY.