bake - February 2013 - 41

decorators. Gourmet donut shops that charge up to
$3 per donut can lose out to supermarkets that offer a

WATCH OUT FOR LOW-PRICE GUARANTEES

dozen donuts for $7.
Making your brand count
Effective branding can do wonders to help the retail
baker’s cause. “I think branding is everything,” says
James Gray, general manager of Glazed and Infused,
arguably Chicago’s hottest new donut shop. “I believe
in the 49/51 rule. Fifty-one percent is the experience the customer has with your business. Forty-nine
percent is the experience they have with your product.
Our branding is recognizable, fun and sophisticated.
We worked with a brand strategist, and we take very
seriously what our brand goes on.”
As another guideline, it is vitally important to understand every cost that goes into your products and
charge accordingly, or else risk losing your shirt on
a high-priced – but expensive to produce – wedding
cake, for example. It’s no secret why retail bakers
increasingly say they’d rather do 10 two-tier ribbon
cakes than one elaborate wedding cake, based on the

A new study conducted by Reims Management School reveals
that consumers are often put off by promises of lowest prices
coupled with high-refund guarantees – contrary to the usual
strategies of many top retailers.
Conventional marketing practice is based on the natural assumption that consumers will choose the cheapest option when
offered the same product at different prices. It is therefore up
to the seller to convince the consumer that theirs is indeed
the lowest price. Guarantees, coupled with a promise of reimbursement of the price difference if a cheaper option is found
elsewhere, are an increasingly common method to deliver this
impression.
New research from Reims Management School has found,
however, that such strategies can cause consumers to become
suspicious of the offer and may avoid making the purchase
altogether. The researchers conducted three experiments consisting of 662 subjects, with the objective of better understanding consumer behavior, their perception and their attitude in
relation to these low price guarantees.

proﬁt they receive.
Creating a buzz about your products in social media
circles can be an effective tool to raise the bar of what
you can charge.
“Sometimes I develop a product that is just too

“If the offer seems too good to be true, the consumer may start
to believe that there is a catch, and become wary or suspicious
of the details. This bad image creates a negative effect. The offer must appear to be credible. It must be truly beneficial and
financially interesting for the consumer,” says Adilson Borges,
head of the Value & Persuasion Research Center at RMS.

expensive and the market simply will not bear that
price,” says Solveig Tofte, owner of Sun Street Bakery
in Minneapolis. “So then either social marketing
comes into play or I jigger the thing to make it easier

And even if the customer doesn’t ask, offer them

to produce.”

options. “We can make your cake exactly like the
picture for this price. We could draw Noah’s Arc on a

Renee Rouwhorst, co-owner of Ryke’s Bakery in

cake for this price. We could add a Noah’s Arc kit for

Muskegon, MI, urges bakery owners, and especially

this price.”

front-room salespeople, to respond to customers with
a slew of options that drill down to what the individual
customer really wants.

Companies that prioritize the customer experience
generate 60% higher proﬁts than their competitors,
according to one recent study.

Never answer a question with a question, she recommends. Answer the customer’s question and then

“Verbalize the process and help the customer under-

follow up with another question: What’s your event?

stand what they are paying for,” Rouwhorst says. “This

How many people are you going to serve? Where will

sets a positive tone and builds trust. You have to build

it be delivered?

that trust by giving them lots of information.”

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bake - February 2013

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