Retail Pricing 1
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The document discusses retail pricing strategies. It begins by defining the goals of setting the right price that is acceptable to both consumers and retailers. It then outlines various external factors that influence pricing decisions. The document goes on to explain different pricing elements, objectives, and dependent variables that must be considered. It provides details on several specific pricing strategies retailers can employ, such as customary pricing, variable pricing, price lining, and leader pricing. It also discusses cost-oriented pricing approaches like markup pricing and markdown pricing. The overall document serves as a guide for retailers to understand how to establish prices for their merchandise.
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Retail pricing strategy by sumit
This document discusses retail pricing strategies. It defines retail price as the cost of a product plus markup. Retailers must determine the right price that customers are willing to pay and retailers accept. Pricing strategies can be cost-oriented, demand-oriented, or competition-oriented. The document outlines various pricing approaches including skimming prices, market penetration pricing, leader pricing, price bundling, multi-unit pricing, discount pricing, everyday low pricing, and odd pricing. Formulas are provided for calculating markup percentage based on retail price or cost.
Retail pricing
The document discusses various retail pricing strategies such as cost plus pricing, manufacturer's suggested retail pricing, competitive pricing, prestige pricing, and discount pricing. It explains that retail price is what a business charges customers for goods and services, and must cover the costs of obtaining, storing, and selling products as well as generate a profit. A retailer's pricing strategy aims to maximize value, engagement, and loyalty while increasing business results.
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17 retail pricing
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Introduction to Retail
This document provides an overview of retailing in India. It defines retailing as the last stage of moving goods to consumers. Retailing involves selling products directly to consumers for personal use. The retail industry in India is large and growing, contributing 10% to GDP. However, 92% of the retail market remains unorganized. Organized retail is growing at 26.8% annually and increasing opportunities are available in areas like operations, supply chain management, marketing, and human resources. The industry faces challenges like infrastructure issues, but FDI is helping drive competition and improvements. Overall the future of retailing in India looks strong.
Pricing methods..
Cost-based pricing methods include mark-up pricing, absorption cost pricing, target rate of return pricing, and marginal cost pricing. Demand-based pricing methods are determined by what the traffic can bear, skimming pricing, and penetration pricing. Other pricing methods include competition-oriented pricing, product line pricing, tender pricing, affordability-based pricing, and differentiated pricing. Pricing strategies must be appropriate for achieving the desired objectives of the firm.
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Retail pricing strategy by sumit
This document discusses retail pricing strategies. It defines retail price as the cost of a product plus markup. Retailers must determine the right price that customers are willing to pay and retailers accept. Pricing strategies can be cost-oriented, demand-oriented, or competition-oriented. The document outlines various pricing approaches including skimming prices, market penetration pricing, leader pricing, price bundling, multi-unit pricing, discount pricing, everyday low pricing, and odd pricing. Formulas are provided for calculating markup percentage based on retail price or cost.
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The document discusses various retail pricing strategies such as cost plus pricing, manufacturer's suggested retail pricing, competitive pricing, prestige pricing, and discount pricing. It explains that retail price is what a business charges customers for goods and services, and must cover the costs of obtaining, storing, and selling products as well as generate a profit. A retailer's pricing strategy aims to maximize value, engagement, and loyalty while increasing business results.
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Cost-based pricing methods include mark-up pricing, absorption cost pricing, target rate of return pricing, and marginal cost pricing. Demand-based pricing methods are determined by what the traffic can bear, skimming pricing, and penetration pricing. Other pricing methods include competition-oriented pricing, product line pricing, tender pricing, affordability-based pricing, and differentiated pricing. Pricing strategies must be appropriate for achieving the desired objectives of the firm.
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2. For retail marketing, the product is the total offer including merchandise, store layout and services. Price is what the customer pays for the benefits. Place refers to distribution channels and inventory management. Promotion communicates the retail offer through various means.
3. Creating the right retail atmosphere through store layout, lighting, music and other sensory elements can influence customer emotions and behavior in the store. Elements like product quality, brand, and customer service also contribute to the total retail product.
international retailing.ppt
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Retail pricing is an integral part of retail marketing that is the source of retailer revenue and communicates store image. Pricing considers demand, competition, policies and economic conditions. The objective is to agree with mission and policies. Retail price consists of cost of goods, expenses and mark-up percentage. Various pricing strategies can be used including cost-based, demand-based, competition-based, everyday low pricing, and odd pricing. Proper retail pricing is key to business profitability.
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There are several basic pricing strategies for retailers including markup pricing, vendor pricing, competitive pricing, and psychological pricing. EDLP (everyday low pricing) and HILO (high-low pricing) are two common approaches, with EDLP more suitable for stores like Walmart that promise low prices on all items and HILO more common for department stores that run frequent sales. Care must be taken when running promotions, as too frequent discounts can condition customers to only buy on sale and undermine a retailer's brand.
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This document discusses pricing strategies in retailing. It outlines several factors that affect retail pricing, including consumers, competitors, manufacturers/suppliers, and government regulations. It also describes basic pricing options like discount orientation, market orientation, and upscale orientation. The document then examines specific pricing strategies retailers can use, such as cost-plus pricing, competition-based pricing, and demand-based pricing. It provides examples of how to calculate markups and make price adjustments over time through markdowns. The overall aim of the pricing strategies discussed is for retailers to set prices that achieve profits while satisfying customers.
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Retailing involves the direct sale of products and services to consumers for their personal use. Retail is driven by consumer spending which depends on disposable income and consumer confidence. Global retail sales have nearly doubled since the 1980s, with the US leading, and retail in Asian economies is growing 6-10% annually. Various types of retailers include specialty stores, department stores, supermarkets/hypermarkets, convenience stores, discount stores, and off-price retailers. Operational issues for retailers include supply chain management, pricing, sales channels, and retail strategies.
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Theoretically, retailers maximize their profits by setting prices based on the price sensitivity of customers and the cost of merchandise and considering the prices being charged by competitors. Initial markup – retail selling price initially set for the merchandise minus the cost of the merchandise
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Retailing from three different perspectives, Characteristics, Activities performed by Retailers, Organized Retail Trade, Advantages of organized retail, Types of Retailing, Store & Non-Store Retailing, Internet Retailing, Catalog Retailing (Mail-order retailing), Direct Selling (door-to-door retailing), Tele Selling, TV Home Shopping, Vending Machines (Automatic Retailing), Retail Formats, On the basis of Merchandise Offered or Store Strategy Mix, Super Market, Hyper Market, Shopping Mall, Form of Ownership, Independent, Retal, Franchising, Leased Department, Co-Operative Outlet
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This document discusses various pricing strategies that companies can employ. It begins by defining pricing and pricing strategies. The objectives of pricing strategies are then outlined, including earning profits, increasing sales volume, maintaining a competitive edge, and creating a good company image. Several specific pricing strategies are then described in detail: penetration pricing, price skimming, competitive pricing, product line pricing, psychological pricing, premium pricing, optional pricing, bundle pricing, cost-based pricing, and cost-plus pricing. For each strategy, the document provides 1-3 points about how the strategy works and its objectives.
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Retailers must make competent decisions about what merchandise to buy, how much to buy, and when to buy it. The merchandise selection communicates the type of company to consumers and allows stores to differentiate themselves. Merchandise management focuses on planning and controlling retailer inventories by balancing financial requirements with a merchandise purchasing strategy. It involves acquiring, handling, and monitoring merchandise categories for a retail organization. Retailers use various methods to plan and calculate inventory levels like basic stock, percentage variation, weeks' supply, and stock-to-sales methods. Visual merchandising is the art of product presentation that puts merchandise in focus to educate and create desire in customers.
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The document summarizes key aspects of retail management. It discusses that retail involves the sale of goods to end consumers for personal use. It also discusses different types of retailers from conventional to modern. The rest of the document outlines the retail management process including planning, buying/making, moving, and selling goods. It provides details on roles like merchants and buyers. It also discusses prerequisites and components of merchandising plans like assessing category performance. Finally, it briefly touches on types of buying models and centralized vs decentralized buying approaches.
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The document discusses various pricing strategies used by companies. It describes strategies for pricing new products, such as market skimming pricing and market penetration pricing. It also discusses strategies for pricing multiple products, adjusting prices based on customers or locations, using promotions, and setting international prices. The goal is to maximize profits by understanding how to effectively set and adjust prices.
Retail Merchandising
Retail merchandising involves planning, buying, and selling merchandise and is a challenging function for retailers. Merchandise management includes analyzing, planning, acquiring, handling, and controlling a retailer's merchandise inventory. Key aspects of merchandising include analysis of customer needs, planning purchases in advance, acquiring merchandise from distributors or manufacturers, handling merchandise distribution to stores, and controlling spending. Merchandising is affected by factors like the size and type of retail organization as well as the merchandise carried.
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This document presents different types of retail stores. It discusses general merchandise retailing which includes specialty stores, specialized markets, department stores, general merchandise discount stores, and off-price retailers. Specialty stores focus on a narrow product line while specialized markets house stores in a particular product category. Department stores offer a broad variety of goods and discount stores sell brand name items at lower prices. Food retailing includes convenience stores, supermarkets, super centers/hypermarkets, and wholesale clubs. Convenience stores offer necessities while supermarkets are self-service retailers over $2 million in annual sales. Super centers combine food and other goods and wholesale clubs require membership fees.
Retail Marketing Management - Marketing Mix
1. The marketing mix consists of the 4 P's - product, price, place, and promotion. It represents the set of controllable tactical marketing tools that a firm uses to produce the desired response in target markets.
2. For retail marketing, the product is the total offer including merchandise, store layout and services. Price is what the customer pays for the benefits. Place refers to distribution channels and inventory management. Promotion communicates the retail offer through various means.
3. Creating the right retail atmosphere through store layout, lighting, music and other sensory elements can influence customer emotions and behavior in the store. Elements like product quality, brand, and customer service also contribute to the total retail product.
international retailing.ppt
International retailing involves transferring retail operations, concepts, management skills, technology, and buying functions to markets outside the home country. Reasons for internationalization include inadvertent changes due to political borders, non-commercial motives like social responsibility, commercial objectives to gain competitive advantages, responding to government regulations, and capitalizing on growth opportunities abroad. Common market entry strategies are acquisition, joint ventures, organic growth, shareholding, franchising, and factors that influence success include operations, concepts, management expertise, technology, and buying power.
Pricing Strategy ppt
What is Pricing Strategy and what are the objectives and factors affecting the Pricing Strategy.
There are Certain types of Pricing Strategies as well. Each and every strategy has its own affect on the product and services offered by an organization.
setting of price
This document outlines the six steps involved in setting a price for products and services: 1) selecting the pricing objective, 2) determining demand, 3) estimating costs, 4) analyzing competitors' costs, prices and offers, 5) selecting a pricing method, and 6) selecting the final price. It discusses factors like demand sensitivity, cost structure, competitors' prices, and customer perceptions that inform each step of the process. The overall goal is to establish a price that maximizes profits or other objectives, based on an analysis of market factors.
Retail format
This document defines and describes various retail store formats and non-store retail formats. Store retail formats include department stores, specialist stores, category killers, convenience stores, supermarkets/superstores/hypermarkets, catalogue shops, discount stores, and factory outlets. Non-store retail formats consist of mail order, direct selling, personal retailing, telesales, and internet retailing. Each format is briefly characterized, such as department stores offering a wide product range across multiple floors and specialist stores focusing on a narrow customer segment.
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There are several basic pricing strategies for retailers including markup pricing, vendor pricing, competitive pricing, and psychological pricing. EDLP (everyday low pricing) and HILO (high-low pricing) are two common approaches, with EDLP more suitable for stores like Walmart that promise low prices on all items and HILO more common for department stores that run frequent sales. Care must be taken when running promotions, as too frequent discounts can condition customers to only buy on sale and undermine a retailer's brand.
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Retail PricingCHAPTER 141Learning objectives14-1.docx
Retail Pricing
CHAPTER 14
1
Learning objectives
14-1 What is the difference between high-low pricing and EDLP?
14-2 What are the advantages/disadvantages of high-low/EDLP pricing?
14-3 What do retailers have to consider when setting prices?
14-4 What does it mean to be “price sensitive?”
14-5 What is the difference between elastic demand and inelastic demand?
14-6 How do retailers set retail prices?
14-7 How do you calculate markup as a dollar amount and a percentage?
14-8 How do you calculate retail price when a certain markup % is desired?
14-9 What is a markdown?
2
Learning objectives (continued)
14-10 What is the difference between an initial markup and a maintained markup?
14-11 How do you calculate a maintained markup as a % of actual sales?
14-12 How do you calculate an initial markup %?
14-13 How do you calculate initial retail price?
14-14 What are the different types of markdowns?
14-15 What are the different types of variable pricing & price discrimination?
14-16 Which pricing techniques can retailers use for increasing sales?
14-17 What are some of the legal and ethical pricing issues?
Why is Pricing Important?
Pricing decision is important because customers have alternatives to choose from and are better informed
Customers are in a position to seek good value
Customer Value = Benefits – Costs
Price cannot be set higher than the value perceived by the customer!
4
14-1 what is the difference between high-low pricing and edlp?
PRICING STRATEGIES
High-Low Pricing
Discount the initial prices through frequent sales promotions
Everyday Low Price (EDLP)
Emphasizes the continuity of retail prices at a level somewhere between the regular non-sale price and the deep-discount sale price of high/low retailers
Doesn’t mean lowest price
14-2 WHAT ARE THE ADVANTAGES/DISADVANTAGES OF… High-Low Pricing?
Advantages
Increases profits through price discrimination
Sales create excitement
Sells merchandise
Increases traffic to the store (or website)
Disadvantages
Trains customers to buy and wait on “deals”
Has an adverse effect on gross margins
6
14-2 what are the advantages/disadvantages of…Everyday Low Pricing (EDLP)
Retailers have adopted a low price guarantee policy to reinforce EDLP strategy
Advantages:
Assures customers of low prices
Reduces advertising and operating expenses
Better supply chain management
Reduces stockouts
Improves inventory management
Disadvantages:
Customers have access to pricing info for retailers anywhere (online)
Lack excitement of deals and specials (cannot offer discounts)
May have to sell a product at a loss
Limited service
7
14-3 what do retailers have to Consider in Setting Retail Prices?
8
14-4 what does it mean to be “price sensitive?”
As the increases
decrease
because fewer customers feel the product is good value
price
sales
Generally,
Price Sensitivity – the degree to which the price of a product affects purchasing behavio ...
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This document discusses pricing decisions and strategies. It covers understanding price, factors that affect pricing like costs and competition, methods for setting prices, and adapting prices over time and locations. The key steps in setting a price include selecting objectives, determining demand and costs, analyzing competitors, choosing a pricing method, and selecting the final price. Common pricing methods are markup pricing, absorption cost pricing, target-return pricing, and perceived value pricing. Companies also consider geographical pricing, discounts, promotional pricing, and price changes over time in response to costs or competitors.
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Negotiation is an important sales skill that involves getting what you want from another person through discussion. It is important for salespeople to negotiate with customers to overcome objections, indifference, skepticism or lack of acceptance towards products and services. Effective negotiation requires preparation, understanding customer needs, illustrating benefits, being patient, listening, making adjustments where possible, and thanking the customer for their time whether a sale is made or not. Common mistakes include lack of preparation, intimidating behavior, impatience, arguing instead of influencing, and not listening.
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Retail Pricing 1
- 1. RETAIL PRICING An Effort by, Anirban Pal (C-08-08) AnirudhBhandegaonkar (C-08-09)
- 6. Pricing strategies Customary pricing – retailer sets price & seeks to maintain those prices over an extended period. Prices that customers can take for granted & stable. Variable pricing – when differences in demand & cost necessitate a change, with a view to increase demand, off season discount. Flexible pricing – offering same products & quantities to different customers at different prices. Price lining – retailers establish specified number of price points for each merchandise type & retailers purchase goods to fit the price points – makes price comparisons easier – can help store to upgrade / down grade customer s preference.
- 9. Skimming Pricing It is a pricing strategy wherein firms change premium prices and attract customers less sensitive to price than to service , assortment and status.
- 10. Penetration Pricing It is a pricing strategy in which the retailer seeks to achieve large revenues by setting low prices and selling high unit volume.
- 11. Psychological pricing Pychologicalpricing is used when prices are set to a certain level where the consumer perceives the price to be fair. The most common method is odd-pricing using figures that end in 5, 7 or 9. It is believed that consumers tend to round down a price of Rs. 99.95 to Rs. 99, rather than Rs.10.
- 13. Markup is Rs.5 or 25% of the cost or 20% on selling price
- 15. Thank You