Chapter 17
? To Describe the Role of Pricing
? To Examine the Impact of
Internal and External Forces on
Pricing
? To Present A Retail Pricing
Framework
? Discount Orientation
? At-The-Market Orientation
? Upscale Orientation
Total Effect
on Pricing Strategy
Government
(federal,state,
and local)
Manufacturers,
wholesalers,and
other suppliers
Consumers
Current and
potential
competition
? Price Elasticity of Demand
– Elastic
– Inelastic
– Unitary Elasticity
? Price Sensitivity
? Economic Consumers
? Status-Oriented Consumers
? Assortment-Oriented Consumers
? Personalizing Consumers
? Convenience-Oriented
Consumers
? Federal
? State
? Local
? Horizontal Price Fixing
– Federal Trade Commission (FTC)
? Vertical Price Fixing
– Consumer Goods Pricing Act
? Price Discrimination
– Robinson-Patman Act
? Supplier vs,Retailer Perspective
? Gray Market Goods
? Price Guarantee
? Products Physically Different
? Non-Competitors
? Competition Not Injured
? Different Supplier Costs
? Market Conditions Change
? Minimum-Price Laws
– Loss Leaders
– Predatory Pricing
? Unit Pricing
? Item Price Removal
? Price Advertising
? Bait Advertising
– Bait-and-Switch
? Gives Consumers Perception of
Always Low Prices
? Most Consumers Will Not Ask for the
Difference
? Deep Discounters Can Be Excluded
? Market Pricing
? Administered Pricing
? Copied Pricing Strategies
– Price Wars
? Market Penetration
? Market Skimming
? Return on Investment
? Early Recovery
? To maintain a proper image,
? To not encourage customers to become overly price-conscious
? To be perceived as fair by all parties
? To be consistent with setting prices,
? To increase customer traffic during slow periods,
? To clear out seasonal merchandise,
? To match competitors’ prices without starting a price war,
? To promote a,we-will-not-be-undersold” philosophy
? To be regarded as the price leader in the market area by consumers,
? To provide ample customer service,
? To minimize the chance of government actions relating to price
advertising and antitrust matters,
? To discourage potential competitors from entering the marketplace,
? To create and maintain customer interest,
? To encourage repeat business
? Competitor
? Items
? Price Leadership
? Consistency
? Demand-Oriented Pricing
? Cost-Oriented Pricing
? Competition-Oriented Pricing
? Integration
? Price-Quality Association
? Prestige Pricing
? Markup Pricing
? Markup Percentage
? Gross Margin
? Variable Markup Policy
? Direct Product Profitability (DPP)
? Customary Pricing
– Every Day Low Price (EDLP)
– Place-based Fluctuations
– Time-based Fluctuations
– Yield Management
? One-Price Policy and Flexible Pricing
– Contingency Pricing
? Odd Pricing
? Leader Pricing
? Multiple-Unit Pricing
– Bundled Pricing
– Unbundled Pricing
? Price Lining
? Markdown
? Additional Markup
? Employee Discount
? Markdown Control
? Timing Markdowns
– Automatic Markdown Plan
? The Role of Pricing in a Retail Strategy
? The Impact of,
– Consumers
– Government
– Manufacturers,Wholesales,and Suppliers
– Competitors
? Pricing Strategy Development
– Objectives
– Broad Policy
– Basic Strategy
– Implementation
– Adjustments
Questions?
Questions?