Ca final prj
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Ca final prj Presentation Transcript

  • 1. PRICING OBJECTIVES
  • 2. Pricing Strategies • Once businesses know the minimum price they can charge they will develop a pricing strategy – A plan to price a product to achieve specific marketing objective • There are 3 main Pricing Strategies – Market Skimming – Penetration Pricing – Competitive Pricing
  • 3. Pricing Method • Value Pricing • Promotional Pricing • Loss-Leader Pricing • Special Event Pricing Other pricing strategies: Buy more, save more Prices reduced on a combination Holding special discounts Highlighting the savings possible The Price Challenge Offer Advertising Advertising is the essential component of brand building . the advertisement is done through various ways, techniques used are: Tag-line  Print-ads  TV-ads  Road side hoarding  Radio ads Fashion shows  Brand endorsement by celebrity.
  • 4. Use of Advanced Technology Product Life Cycle Product Complexity Channels of Distribution Quality Requirements Product Diversity 0 100 1 2 3 4 Composition of Cost Direct Material Labour Overheads
  • 5. Conventional Costing Expenses Cost Objects AB Costing Resources Activities Cost Objects Economic Element Work Performed Product or service Total Cost (Material + Labour+ Overheads)
  • 6. Business Level Strategies Two Generic Business Level Strategies Cost Leadership: • generate economic value by having lower costs than competitors Product Differentiation: • generate economic value by offering a product that customers prefer over competitors’ product Example: Wal-Mart Example: Harley-Davidson
  • 7. Value of a Cost Advantage Rivalry Entry Buyers SuppliersSubstitutes • increases capital requirements for entrants competitors rationally avoid price competition • limits attractiveness of substitutes • increases importance of the focal firm to the supplier • lowers incentives for buyers to vertically integrate
  • 8. Production Finance R&D Accounting Marketing Human Resources Chief Executive Officer Functional Structure Organizational Structure
  • 9. Mission / Vision / Positioning And Establishment  VISION Future Group shall deliver Everything, Everywhere, Every time for Every Indian Consumer in the most profitable manner.  MISSION We share the vision and belief that our customers and stakeholders shall be served only by creating and executing future scenarios in the consumption space leading to economic development. Customers Segmentation Big Bazaar targets higher and upper middle class customers.  The large and growing young working population is a preferred customer segment.  Big Bazaar specifically targets working women and home makers who are the primary decision makers.
  • 10.  Swot Analysis Physical Evidence People Place Promotion Price Product Process 7 ‘P’ Marketing Mix
  • 11. DEVELOPMENT AND EVOLUTION OF RETAIL Traditional Daily Reach Govt. Support Modern Formats Weekly Markets Village Fairs, Melas Local Kiranas PDS Cooperatives Hypermarkets, Supermarkets, Departmental Stores etc Shopping & entertainment Neighborhood & Convenience Low Price Shopping experience& efficiency Rural Retail Adhaar, Hariyali etc New Experience
  • 12. 1) Identifying a Target Market 2) Selecting a Product Strategy 3) Selecting a Customer Service Strategy 4) Selecting a Pricing Strategy 5) Choosing a Location 6) Building a Promotional Strategy 7) Creating a Store Atmosphere How Retailers Compete Retail Locations  Planned Shopping Center  Shopping Mall  Regional Mall  Lifestyle Mall
  • 13. Employee Type & Density Merchandise Type & Density Fixture Type & Density Sound Odors Visual Factors Factors in Creating Store’s Atmosphere How many How knowledgeable How helpful / invasive Fit the image of the product Good personal sellers Factors in Personal decisions
  • 14. Areas of Retail Operation covered • Check out Management • Stores Administration & Facilities Management • Loss ( Shrinkage ) Prevention. • Visual Merchandising and Displays.
  • 15. Stores Operating Parameters- Stocks • Avg. Selling Price Total value of goods sold Total Qty. Sold • Avg. Stock Price Total value of goods in stock Total Qty. in stock • Stock Turnover/ Inventory Turnover Ratio Net Sales Avg. Retail value of inventory • Percentage Inventory Carrying Cost (Inventory Carrying Cost Net Sales) * 100
  • 16. Stores Operating Parameters- Stocks • Gross Margin Return on inventory Gross Margin Avg. Value of Inventory • Mark Down Goods Percentage (Net Sales at Mark Down Total Net Sales) * 100 • Shrinkage to Net Sales (Actual Inventory – Booked Inventory) -------------------------------------------------- * 100 Net Sales
  • 17. Stores Operating Parameters- Employees • Gross Margin per full time employee Total Gross Margin Total no. of FT employees • Suppliers /Quantity or Value purchased per buyer Total Suppliers /Quantity or Value purchased Total no. Buyers
  • 18. Cash Register Express Cash Register Express (or CRE) is a cost-effective computerized cash register that keeps your inventory costs down, reduces theft and makes more money! CRE is Windows-based POS system exclusively for retail and video stores. Features : Easy to use: Fast lookups by barcode or name Built-in help system Bar-code ready Credit card processing with IC Verify Built-in backup Salesperson tracking Time clock Handles multiple clerks Handles multiple cash drawers Password protection Check out Management
  • 19. Broad compatibility Microsoft Access compatible Quickbooks compatible Helps manage customer accounts Detailed customer history Customer quick search Promotions for preferred customers Family memberships Coupon plans Gift certificates Mailing labels Management flexibility Flexible pricing Flexible taxing Sophisticated reporting Detailed inventory reports Management reports Financial summaries Check out Management
  • 20. Assessing and responding to a competitor’s price cut (depending on the market structure)
  • 21. • Factors that we expect to affect the demand for the good include: Population (n) Price of the good (pi) Price of other goods (pj) Income (y) • Expectations of future prices Tastes (T)
  • 22. Pricing Strategies Value Pricing
  • 23. Contribution Pricing • Contribution = Selling Price – Variable (direct costs) • Prices set to ensure coverage of variable costs and a ‘contribution’ to the fixed costs • Similar in principle to marginal cost pricing • Break-even analysis might be useful in such circumstances
  • 24. Cost-Plus Pricing • Calculation of the average cost (AC) plus a mark up • AC = Total Cost/Output