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	<title>Coloradan &#187; grocery</title>
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	<link>http://www.coloradanmagazine.org</link>
	<description>The University of Colorado alumni magazine</description>
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		<title>Shopping with Donnie</title>
		<link>http://www.coloradanmagazine.org/2009/03/01/shopping-with-donnie/</link>
		<comments>http://www.coloradanmagazine.org/2009/03/01/shopping-with-donnie/#comments</comments>
		<pubDate>Sun, 01 Mar 2009 17:00:49 +0000</pubDate>
		<dc:creator>Doug McPherson</dc:creator>
				<category><![CDATA[Features]]></category>
		<category><![CDATA[comparison pricing]]></category>
		<category><![CDATA[Donnie Lichtenstein]]></category>
		<category><![CDATA[grocery]]></category>
		<category><![CDATA[shopping]]></category>

		<guid isPermaLink="false">http://www.coloradanmagazine.org/?p=76</guid>
		<description><![CDATA[Donnie Lichtenstein, a CU marketing professor, remembers looking in the newspaper as a young child and regularly seeing an ad for barbecue grills from Sears. "They were always, always on sale. I thought, ‘How can that be? They can't always be on sale.' I guess my curiosity just grew from there."]]></description>
			<content:encoded><![CDATA[<div class="wp-caption alignleft" style="width: 410px"><a title="CU professor Donnie Lichtenstein checks out prices at Lucky's Market in Boulder." href="http://www.coloradanmagazine.org/wp-content/gallery/2009-03/features/shopping-with-donnie/shopping_with_donnie_01_2009-03.jpg" rel="lightbox[76]"><img class="ngg-singlepic ngg-left" src="http://www.coloradanmagazine.org/wp-content/gallery/2009-03/features/shopping-with-donnie/shopping_with_donnie_01_2009-03.jpg" alt="CU professor Donnie Lichtenstein checks out prices at Lucky's Market in Boulder." width="400" height="265" /></a><p class="wp-caption-text">CU professor Donnie Lichtenstein checks out prices at Lucky&#39;s Market in Boulder.</p></div>
<p>Donnie Lichtenstein, a CU marketing professor, remembers looking in the newspaper as a young child and regularly seeing an ad for barbecue grills from Sears.</p>
<p>&#8220;They were always, always on sale. I thought, ‘How can that be? They can&#8217;t always be on sale.&#8217; I guess my curiosity just grew from there.&#8221;</p>
<p>Fittingly perhaps, his curiosity has led to figuring out how merchants try to persuade consumers. And even though he&#8217;s considered a national expert in pricing &#8211; and won a lifetime achievement award for his work in behavioral pricing research &#8211; he still comes across as humble. He even admits he finds it hard not to get sucked in by all the tricks retailers can pull.</p>
<p>&#8220;I mean I study this stuff and when I&#8217;m out shopping I still find myself having to stop and say, ‘You know better,&#8217; &#8221; he says. &#8220;Retailers can be so seductive and very powerful. I&#8217;m not immune. I just try my best to hold their feet to the fire.&#8221;</p>
<p>One group that might feel the heat is grocery stores. He says they have gotten particularly good at separating shoppers from their cash. Over the past 20 years they&#8217;ve made sweeping changes to their stores with layouts, promotions, product placement and partnerships.</p>
<p>&#8220;Grocery stores have had to change to stay competitive &#8211; they&#8217;ve added a lot of tools to get shoppers to stay longer and spend more,&#8221; Lichtenstein says.</p>
<p>Examples include adding Starbucks and bakeries.</p>
<p>&#8220;The goal is to make the store a destination,&#8221; he says. &#8220;They want to make the store and shopping a more pleasant experience, and at the same time the new additions have good markups and margins, such as bakery items, soup bars and sushi counters.&#8221;</p>
<h3>Homework in savings</h3>
<div class="wp-caption alignleft" style="width: 410px"><a title="A Lucky's Market worker stocks navel oranges at a price CU professor Donnie Lichtenstein couldn't pass up." href="http://www.coloradanmagazine.org/wp-content/gallery/2009-03/features/shopping-with-donnie/shopping_with_donnie_02_2009-03.jpg" rel="lightbox[76]"><img class="ngg-singlepic ngg-left" title="A Lucky's Market worker stocks navel oranges at a price CU professor Donnie Lichtenstein couldn't pass up." src="http://www.coloradanmagazine.org/wp-content/gallery/2009-03/features/shopping-with-donnie/shopping_with_donnie_02_2009-03.jpg" alt="Shopping with Donnie" width="400" height="265" /></a><p class="wp-caption-text">A Lucky&#39;s Market worker stocks navel oranges at a price CU professor Donnie Lichtenstein couldn&#39;t pass up.</p></div>
<p>Lichtenstein says when you first enter, for example, beware of those displays you see right inside the door and at the end of the aisles. In this grocery store there&#8217;s a six-foot stack of bottled water for $3.68 and an end-of-aisle display of Raisin Bran for $2.50 a box. Deals? Maybe. The key is the location.</p>
<p>&#8220;Grocery stores used to save these areas for specials and consumers took notice,&#8221; Lichtenstein says. &#8220;But it&#8217;s classical conditioning. Now stores will put the higher margin items in those places, but shoppers still think they&#8217;re a good deal.&#8221;</p>
<p>Lichtenstein pauses. He wants to talk comparison pricing. &#8220;I remember a couple of years ago I was looking to buy a tennis racquet. So I went to the store and remember seeing a sale sticker. The racquet was $300, but it was marked down to only $150. ‘Wow, half off,&#8217; I thought. But then I caught myself and examined whether or not I thought the racquet was really worth that. Be careful not to fall into the comparison trap.&#8221;</p>
<p>Now looking down the refrigerated dairy aisle, little red stickers hang intermittently from shelves as apparent deals. But Lichtenstein warns of these signs, particularly the ones that say &#8220;Limit 6&#8243; or &#8220;Limit 10.&#8221; &#8220;When people see a limit on what they can buy, they automatically assume it must be a good deal,&#8221; Lichtenstein says. &#8220;But that&#8217;s not always the case.&#8221;</p>
<p>It&#8217;s easy to see Lichtenstein is in his element. He loves knowing the tricks. &#8220;I&#8217;ve always been a real deal-prone consumer,&#8221; he says. &#8220;After I buy something I like thinking about the bargain I got.&#8221;</p>
<p>He also likes teaching undergraduate and graduate students, as well as pursuing his research in marketing. &#8220;Marketing research is especially fun because I like to show students it can be applied to other areas like medicine and even elections. It&#8217;s the same science behind why a product can be made attractive to the public.&#8221;</p>
<p>He can&#8217;t resist another teaching moment. At the end of that aisle stands a nice lady behind a table who&#8217;s offering free tastes of yogurt. &#8220;If you try it, just know it&#8217;s a trick to make you feel obligated. It&#8217;s the reciprocity rule when someone gives you something, you feel obligated to repay them,&#8221; he says.</p>
<h3>Do the math</h3>
<p>But beyond the store&#8217;s little money-making land mines, Lichtenstein explains at the root sits an assumption that shoppers are lazy and won&#8217;t do the math or search out the bargain. Two examples: Most higher margin items are placed at eye level. The hypothesis is you won&#8217;t bend down to find a bargain. Grocers will highlight the prices of certain products even though they&#8217;re not the best price per ounce. The premise is you won&#8217;t compare price per ounce to find the better deal.</p>
<p>And therein lies an important shopping lesson, one he seems to want everyone to know: &#8220;Be alert and vigilant,&#8221; he says in a tone as if he&#8217;s speaking to a daughter who&#8217;s about to drive a car for the first time.</p>
<p>&#8220;Most people do shop in a mindless, spacey manner,&#8221; he says. &#8220;And many don&#8217;t pay attention to prices; most can&#8217;t tell you what they will pay for the ketchup in their cart. It&#8217;s work, so pay attention when you shop.&#8221;</p>
<p>Another tip: &#8220;Part of being a good shopper starts before you enter the store.&#8221;</p>
<p>He recommends coupons, especially for items you buy a lot. Lichtenstein buys coupons on e-Bay because he often finds multiples of coupons for products he buys regularly. And sometimes you can find coupons that aren&#8217;t in your Sunday paper.</p>
<p>&#8220;Just know a coupon can change the ratio between the price per ounce, so that 10 oz. bottle of ketchup might be a better buy than the 20 oz. bottle,&#8221; Lichtenstein says. &#8220;You can do better with coupons overall, but it takes effort.&#8221;</p>
<p>And create a &#8220;trip chain&#8221; by cherry picking stores with the best deals. It&#8217;s often worth the trip.</p>
<p>Something else that makes the work worth it &#8211; a good feeling.</p>
<p>&#8220;There&#8217;s something called transaction utility, which is basically knowing you got the best deal and that can be fun for shoppers; I know it&#8217;s fun for me.&#8221;</p>
<p class="author-bio">Doug McPherson, a freelance writer in Centennial, Colo., loves to save money, especially on food. &#8220;That&#8217;s one habit I can&#8217;t seem to kick &#8211; eating,&#8221; he says.</p>
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