Strategic Movements: July 2019


Tim J. Smith, PhD
Founder and CEO, Wiglaf Pricing

Published July 17, 2019

Household Insecticide Pricing

Raid, a household insecticide by S.C. Johnson & Son Inc. with roughly 50% U.S. market share, sells for $4.27 per 20 oz can canister ($0.21 per oz).  Procter & Gamble Co. has recently launched Zevo, a competing household insecticide, for $6.97 per 10 oz can canister ($0.70 per oz). Does Zevo warrant 3x the price per ounce over Raid?

Higher pricing justified for eco-friendly pesticides versus harmful chemicals

Differential Benefit:  Safety 

Zevo kills insects with chemicals that are benign to mammals while Raid kills using chemicals that can cause irreversible neurological damage and death. While Raid is safe if used according to label directions, people don’t want to hear that their home cleaning and maintenance habits may kill their children and pets. On a messaging level, S.C. Johnson must play defense on an issue it would rather not discuss while Procter & Gamble can talk and show how safe their product is. Considering the power of fear in shifting buying habits, the launch price on Zevo could have been set even higher.

About The Author

Tim J. Smith, PhD, is the founder and CEO of Wiglaf Pricing, an Adjunct Professor of Marketing and Economics at DePaul University, and the author of Pricing Done Right (Wiley 2016) and Pricing Strategy (Cengage 2012). At Wiglaf Pricing, Tim leads client engagements. Smith’s popular business book, Pricing Done Right: The Pricing Framework Proven Successful by the World’s Most Profitable Companies, was noted by Dennis Stone, CEO of Overhead Door Corp, as "Essential reading… While many books cover the concepts of pricing, Pricing Done Right goes the additional step of applying the concepts in the real world." Tim’s textbook, Pricing Strategy: Setting Price Levels, Managing Price Discounts, & Establishing Price Structures, has been described by independent reviewers as “the most comprehensive pricing strategy book” on the market. As well as serving as the Academic Advisor to the Professional Pricing Society’s Certified Pricing Professional program, Tim is a member of the American Marketing Association and American Physical Society. He holds a BS in Physics and Chemistry from Southern Methodist University, a BA in Mathematics from Southern Methodist University, a PhD in Physical Chemistry from the University of Chicago, and an MBA with high honors in Strategy and Marketing from the University of Chicago GSB.