The shelf tag shows the total price (item price) and price per unit (unit price) for the food item. It is usually posted on the shelf below the food. The "unit price" tells you the cost per pound, quart, or other unit of weight or volume of a food package. In retail, unit price is the price for a single unit of measure of a product sold in more or less than the single unit. In a survey of nearly 200 senior marketing managers, 51 percent responded that they found the "average price per unit" metric very useful in managing and monitoring their businesses, while only 16% found "price per statistical unit" very useful. Both of these metrics have value in identifying market movements. If the price of each product variant remained unchanged, for example, but there was a shift in the mix of volume sold, then the average price per unit would change, but the price per statistical unit would not. If they are not, marketers may lose sight of what is happening to prices and why. As in analyses of different channels, these product and price variations must be reflected accurately in overall average prices. Statistical units are also called equivalent units.Īverage price per unit and prices per statistical unit are needed by marketers who sell the same product in different packages, sizes, forms, or configurations at a variety of different prices. If we use a standard, rather than an actual mix of sizes and product varieties, the result is price per statistical unit. Average prices can be calculated by weighting different unit selling prices by the percentage of unit sales (mix) for each product variant. When one product is sold in variants, such as bottle sizes, managers must define "comparable" units. A product's average price is the result of dividing the product's total sales revenue by the total units sold.
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