RETAIL PRICING AND STRATEGIES REAL COMPANY EXAMPLES AND THEIR PRICING STRATEGIES IMPLEMENTED

1. PRESIDENCY BUSINESS SCHOOL
TOPIC-
RETAIL PRICING AND STRATEGIES
SUBJECT-
RETAIL MARKETING
PRESENTED BY-
SHLOK D SACHDEV
VANITHA VK
YASHWANTH A

3. INTRODUCTION:
What Is Retail?
• Retail is the activity of selling goods
and services to consumers, usually in
small quantities for personal use.
Retailers buy products in bulk from
manufacturers or wholesalers and
then sell them individually to
customers. Retailing can take place
in many different settings, including
physical stores, online stores, and
even through catalogs or mail order.

4. RETAIL PRICING:
• Retail pricing is the process of setting the final price that
customers pay for goods in a retail store. It's the
balancing act between:
• Profitability: Covering costs and making a healthy profit.
• Competitiveness: Staying in line with what similar
products cost elsewhere.
• Customer perception: Making the price attractive and
believable for the value offered.

5. PRICE STRATEGY:
• In retail, a price strategy is a well-
defined approach to setting the
prices of your products,
considering various factors like
costs, target audience, competition,
and overall business goals. It's not
just about slapping a number on a
product; it's a carefully crafted
plan to maximize profit, attract
customers, and create a brand
image.

6. RETAIL PRICING STRATEGIES IN SETTING
THE RIGHT PRICE:
• Cost Plus Pricing
• MSRP
• Competitive Pricing
• Prestige Pricing (Pricing above Competition)
• Psychological Pricing
• Multiple Pricing
• Discount Pricing

7. COST PLUS PRICING:
• Cost-plus pricing, also known as
markup pricing, is a straightforward
yet widely used strategy for setting
product or service prices. It involves
calculating the total cost of producing
or delivering an item and then adding
a fixed percentage markup to arrive
at the final selling price.
• It's often visualized as a simple
equation:
• Selling Price = Cost + (Markup
Rate x Cost)

8. EXAMPLES OF COST
PLUS PRICING:
• 1. Domino's Pizza: The cost of pizza
dough, toppings, rent, staff salaries, etc., are
factored in with a set profit margin to set pizza
prices.
• 2. Retail Stores : Lifestyle : They determine the
landed cost of imported clothing, add customs
duties, transportation, store costs, and a markup
to arrive at the selling price.

9. MSRP (MANUFACTURER’S
SUGGESTED RETAIL PRICE)
• The manufacturer's suggested
retail price (MSRP), also known
as the list price or recommended
retail price (RRP), is the price
recommended by a product's
manufacturer for retailers to sell
it at. It serves as a starting point
for determining the final sale
price of a product in the market.

10. EXAMPLES
OF MSRP:

11. COMPETITIVE
PRICING:
• In retail, competitive pricing is a
strategy where you set your
product prices based on what
your competitors are charging
for similar products. It's about
finding the sweet spot between
being attractive to customers
(not too expensive) and
profitable for your business (not
too cheap).

12. EXAMPLES OF
COMPETITIVE
PRICING:
• Flipkart vs. Amazon : These giants constantly monitor
each other's prices and offers on similar products, often
matching or slightly undercutting each other to attract
customers. They also utilize flash sales, exclusive deals,
and bundled offerings to stay competitive.
• Myntra vs. Nykaa : Both online fashion retailers
compete fiercely, offering discounts, coupons, and loyalty
programs to attract customers. Myntra might focus on
broader fashion categories, while Nykaa targets beauty
and personal care predominantly, influencing their
pricing strategies.

13. PRESTIGE PRICING{PRICING ABOVE
COMPETITION}
• Prestige pricing, also known as image pricing or premium
pricing, is a deliberate strategy in retail where products
are intentionally priced higher than their actual cost or
production value. This strategy aims to create an aura of
exclusivity, luxury, and superior quality, attracting
customers who value these attributes over pure cost.

14. EXAMPLES OF PRESTIGE
PRICING:
• Apple :- Apple is known for pricing its
products, especially Iphone and MacBook, at
a premium compared to its competitors in
the market.
• Rolex:- Rolex is a luxury watch brand that
employs prestige pricing to position itself
as a high-end prestigious choice in the watch
market.
• Tesla:- Tesla, an electric car manufacturer,
positions itself as the leader in the electric
vehicle market with premium pricing.
• Starbucks:- Starbucks features unique and
rare coffees at higher prices, appealing to
customers looking for a more exclusive and
premium coffee experience.

15. PSYCHOLOGICAL
PRICING:
• Psychological pricing in
retail is a fascinating
strategy that uses the power
of the mind to influence
customer behavior and
ultimately boost sales. It's
all about creating the
perception of value rather
than just focusing on the
actual price tag.

16. EXAMPLES OF
PSYCHOLOGICAL
PRICING:
• Charm pricing : This is the practice of
ending prices with numbers like 5 or 9,
which are perceived as being lower
than round numbers. For example, a
product might be priced at ₹199
instead of ₹200. Many companies in
India use this tactic, including:
• Flipkart : This e-commerce giant
frequently uses charm pricing on its
products. For example, you might see a
phone listed for ₹14,999 instead of
₹15,000.Myntra: This online fashion
retailer also uses charm pricing to
make its products seem more
affordable. For example, you might see
a dress listed for ₹499 instead of ₹500.

17. MULTIPLE PRICING:
• Multiple pricing in retail,
also known as multiple unit
pricing, refers to a strategy
where you offer different
prices based on the quantity
of the same item purchased.
Essentially, you incentivize
customers to buy more
units by offering a lower
price per unit when they
purchase a larger quantity.

18. EXAMPLES OF MULTIPLE
PRICING:
• Telecom: Airtel and Jio offer bundled plans that
combine mobile data, calls, and OTT subscriptions
at a discounted price compared to buying them
separately.
• Fast Food: McDonald's and KFC offer combo
meals that include a burger, fries, and a drink at a
lower price than buying them individually.
• Airlines: Indigo offers senior citizen discounts and
student discounts on flight tickets.
• E-commerce: Many online platforms like Amazon
and Flipkart offer targeted discounts and coupons
to specific customer segments based on their
purchase history or demographics.

19. DISCOUNT PRICING:
• In retail, discount pricing is a promotional strategy
where the original price of a product or service is
temporarily reduced to attract customers, boost
sales, and clear out inventory. It's a powerful tool
that can be used in various ways depending on your
goals and target audience.

20. EXAMPLES OF
DISCOUNT
PRICING:
• E - Commerce Platforms :
• Flipkart : "Big Billion Days" and "End of Season
Sales" offer up to 80% off on various products.
• Clothing and fashion retailers:
• Levi's: "End of Season Sale" and "Student Discount"
offer up to 50% off on jeans, jackets, and accessories.
• Westside: "End of Season Sale" and "Mid-Season
Clearance" provide discounts of 30-60% on
clothing, footwear, and homeware.

21. CONCLUSION:
• In Conclusion, a well crafted retail Pricing strategy is
important for the success of any business in the
competitive market landscape. Ultimately, a thoughtful
pricing strategy not only influences consumer
perception but also contributes significantly to the
overall financial health and sustainability of a retail
venture.