Chapter 17 Darwin Etang
Transcript of Chapter 17 Darwin Etang
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RICING IN
RETAILING
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ChapterObjectives To describetheroleofpricinginaretailstrate
andtoshowthatpricingdecisionsmustbemainanintegratedandadaptivemanner To examinetheimpactthat consumers,government,manufacturers,wholesalersand
othersuppliers,current/potentialcompetitorshaveonpricingdecisionsTopresentaframeworkfor developinga retailprice strategy:objectives,broadpolicy,basic
strategy,implementation,andadjustments
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icingOptionsforRetailer
Discountorientation
At-the-marketorientation
Upscaleorientation
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Figure17-1:Barnes&Noble!uge
"electionan#$iscounts
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Figure17-%:Coparison"hopping
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re17-':Factors(ectingRetailPrice"t
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*hesensitivit)ofcustoerstopricechanges
intersofthe+uantitiesthe),illbu):
lasticSmall percentagechanges inprice lead tosubstantial percentagechanges in the numberof units bought.
.nelasticarge percentagechanges inprice lead tosmall percentage changes inthe numberof units bought.
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le17-1:/ovie*heater0slasticit)of$e
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Market Segments by rice
Sensitivity
!conomicconsumers
Status"oriented consumers
#ssortment"oriented consumers
$ersonali%ing consumers
&onvenience"oriented consumers
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The Government and Retail ricing
Horizontal
Price
Fixing
VerticalPricingFixing
PriceDiscrimination(Robinson-PatmanAct)
MinimumPriceLaws
nitPricing
!tem
Price
Remo"al
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!sti"iable rice #iscrimination
$nder the
Robinson% atman Act
$roducts are physically di'erent.
The retailers paying di'erent prices are nocompetitors.
&ompetition is not injured.
$rice di'erences are due todi'erences insuppliercosts.
(arket conditions change ) costs rise or falorcompeting suppliers shift prices.
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Copetitionan#RetailPricing
/ar2etpricingRetailers oftenpricesiilarl)
to each other an#
have
lesscontrol
overprice
because consuerscan
easil) shop aroun#3
#inistere#pricingFirssee2toattract consuers on
the
basis
of#istinctive
retailing
i4es3
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&ig!re '(%)* A &rame+ork "or
#evelo,ing a Retail
rice Strategy
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Market
Skimming
Mar$etPenetration
Objectivesan#Pricing
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%ocom&etitorswill'a"elower&ricesnocom&etitors
will
'a"e
'ig'er&rices
or
&rices
willbe
consistent
wit'
com&etitors
Allitemswillbe&rice#in#e&en#entl*ort'e&rices+orall
itemswill
be
interrelate#
to
maintain
imagean#
ensure
&ro&er
mar$u&s
Price
lea#ers'i&will
be
exerte#
com&etitors
will
be&rice
lea#ers
an#
set
&rices
,rst
or
&rices
will
beset
in#e&en#ent
o+
com&etitors
Priceswillbeconstanto"era*earorseasonor
&rices
will
c'ange
i+
costs
c'ange
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Deman#-oriente#
&ricing
ost-oriente#&ricing
om&etition-oriente#&ricing
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Ps)chologicalpricing
Price-.ualit*association
Prestige
&ricing
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Table '(%)* Mark!, E-!ivalents
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*igure+":
-ow to
etermi
neirect
$roduct$rotabi
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!+&ricesarere#uce#/willre"enuesincreasegreatl*0(Deman#
orientation)
1'oul##i2erent&ricesbec'arge#+ora&ro#uctbase#
on
negotiations
wit'
customers/
seasonalit*/an#
so
on0
(Deman#
orientation)
3illagi"en&ricele"elallowatra#itionalmar$u&tobe
attaine#0
(ost
orientation)
3'at
&rice
le"el
is
necessar*
+ora
&ro#uct
re.uiring
s&ecial
costs0
(ost
orientation)3'at
&rice
le"els
are
com&etitors
setting0(om&etiti"eorientation)
an
abo"e-mar$et
&rices
be
set
#ue
toa
su&erior
image0
(om&etiti"eorientation)
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$rice Strategy &oncepts
ustomar*
Pricing
4"er*#a*LowPricing
Variable
Pricing
5iel#
Management
Pricing6ne-Price
Polic*
Flexible
Pricing
ontingenc*Pricing
6##
PricingLea#erPricing
Multi&le-nit
Pricing
Price
Lining
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ure +"0: 1al"(art and !veryday ow $
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&ig!re '(%'.* /dd Pricing
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A
,rm
coul#
see$
to
'a"e
s'o&&ers
increaset'eirtotal&urc'aseso+anitem
7'isa&&roac'can'el&sellslow-mo"ingan#en#-o+-seasonmerc'an#ise
Pricebun#lingma*increasesaleso+relate#items
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A#a&ti"emec'anism
Mar$#own
A##itional
mar$u&
4m&lo*ee#iscount
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&ig!re'(%''*PriceChangeA!thori0ation
&orm
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4arl*
mar$#own
&olic*
Latemar$#own&olic*
1taggere#mar$#own&olic*
Automaticmar$#own&lan
1torewi#eclearance
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&ig!re '(%'1* Giant Eagle 2 Going
3eyond Everyday Lo+ ricing