Class Retail 7
Pricing Objectives and Policies
Determined by: Merchandise; Location & Competition; Promotion; Credit; Customer Service; Store Image; Legal Constraints
Basic Objectives: Profit Oriented; Target Return; Profit Maximization; Skimming; Penetration; Sales Oriented; Status Quo
Below-Market Pricing Policy: setting prices at lower than average for the market for the product offering; to build store traffic; generate high sales; gross margin dollars / square foot
At-Market: Price Zone
Above-Market Pricing Policy: nonprice factors more important to target audience: unique merchandise offerings; services provided; convenient locations; extended hours of operations
Pricing Stretegies: Customary; Variable; Flexible; One-Price
Price Lining: enables customers to make merchandise comparisons, establishing a limited number of price points. Customers can Trade Up, or Trade Down.
Retailers select price lines that have the strongest consumer demand for their target audience; price linking also simplifies the buying process and inventory management.
Specific tactics: Odd Pricing; Multiple Unit Pricing; Bundle Pricing; Bait-and-Switch Pricing; Private-Label Brand Pricing