International and Indian practice / regulations for selling commodities by retailers to consumers:
In international and Indian market, loose products are sold in standard unit of measure, such as per kilogram or litre or number or length, etc. So for consumer it is easy to compare price variation of different retailers.
In India, all packaged products have to mention Maximum Retail Price (MRP). Declaration of MRP is mandated by Legal Metrology (Packaged Commodity) Rules, 2011. MRP is a manufacturer declared price that is the highest price that can be charged for a product sold in India.
Whereas mostly in rest of the world, Retail Sale Price of packaged products used to vary from retailer to retailer.
Both systems have their own merits and demerits.
What is Unit Price?
Unit pricing – or comparative pricing – is a way to show the price of a commodity in relation to a standard unit of measure, such as the kilogram or litre. Unit price gives fair idea about cheaper and costlier brands of same product.
Is there any standard for Unit Price?
ISO (International Organization for Standardization) is an independent, non-governmental, international organization has developed ISO 21041:2018, namely, Guidance on unit pricing, sets down several prerequisites that will allow consumers to compare the prices of similar items to make more informed buying choices.
Benefits to consumer when Unit Price along with MRP declared on packaged products:
Unit prices can be used to make many types of value comparisons, including between:
- Package sizes:
For example, if one juice manufacturer offers juice in a 200ml pack and another manufacturer offers juice in a 160ml pack, then unit pricing demands that the prices of both manufacturers be displayed according to one litre. This way, consumers can easily decide which company to opt for instead of having to perform calculations.
- Various brands of same product:
Example: Muesli (Fruit & Nut), (Published in “CONSUMER VOICE” magazine)
Vide variation in price of cheapest and costliest brand. As per unit price, cheapest brand is Patanjali (Rs. 45.00 per 100 gram) and costliest Bagarry’s (Rs. 72.50 per 100gram).