HelloFresh is a subscription-based meal kit delivery service headquartered in Germany. The company specializes in online food services delivering various meals and recipes for the users to choose from on selected weekdays. Price sensitivity refers to the degree to which the cost of the product influences demand changes. Price sensitivity varies relative to other purchasing criteria; unique value effect, substitute effect, and end benefit effect (Schijndel, 2020). HelloFresh is price-insensitive based on consumer and product characteristics.
HelloFresh products possess a higher value than competitors, increasing convenience for customers who purchase nutritious, high-quality, healthy foods online at low prices. This allows them to maintain an image of high standards surpassing their competition, such as Blue Apron. The company offers six different meal plans; meat and veggies, veggies, family-friendly, calorie smart, quick and easy, and pescatarian. The consumer also chooses from a 20-meal pack available each week. HelloFresh products’ price is about $8 to $11 per person, per meal with a fixed shipping fee of $7.99 per box, thus more affordable than its competitors; Sun Basket and Green Chef, whose prices range from $10 to $13. Consumers are more price-insensitive when the competitor’s products have a higher price relative to Hello Fresh budget prices; thus, a slight increase in price does not translate to decreased demand.
The end benefits of the products are high; thus, consumers are less price-sensitive as they incur low expenses compared to the final product’s total cost. The brand offers coking novices, restricted diets, a wide variety of menus, and healthy alternatives. The meals are convenient and easy to prepare as recipes are simple to understand. The packaging is excellent as all ingredients are labeled, and perishable products are packed in vacuum-sealed bags to maintain freshness. These elements breed loyalty among consumers; loyal customers are less price-sensitive than non-loyal customers. HelloFresh is also price-insensitive due to the shared cost effect as its offers are budget-friendly when cooking for more than one person. Its vast selection of meals provides busy families with the means to cook healthy food quickly by choosing meal plans for two to four persons.
Schijndel, T. V. (2020). Meal-kits: What drives consumption?