Presentation on Retail Pricing

Group: Manoj Panjwani Nitesh Khanna Prerna Bhadani Raghav Sangeev Jha Swapnil Karn

Understanding Price As a Concept.

Price is the monetary value assigned by the seller to something purchase.

A transaction by a buyer as their willingness to pay for the benefits the products delivers.

Price Sensitivity.
Different price points affects demand of particular merchandise

Elasticity =

% change in quantity demand ------------------------------------------------------% changes in any demand determinant

Major Factors Affecting Price Sensitivity

Importance of purchase Effect

Perceive d Substitut es Effects

Price Quality Effect

Difficult compariso n Effect

Unique Value effect

Fairnes s & Transpa rency Effect

Expendit ure Effect

Approaches To Pricing The retail Product.

Cost-Oriented pricing Cost-Plus Pricing

Select the target market Determine the cost of the goods in stores Determine the ceiling price Apply the mark-up pricing

Rate-Of-return pricing

Profit generated in relation to the business

Demand-Oriented Pricing
Discrimination Variable or flexible pricing often used when products are sold at Pricing two or more different price. Backward Pricing
Market-based method of pricing which focuses on what the consumer is willing to pay. Shortage of supply of the product or the brand of product has been associated with added value.

Skimming Pricing

Conti

Example
Discrimination pricing

Skimming Pricing

Leader Pricing

Pricing Near to cost rather than at a loss

Competitive Match the market prices of competitive retailers Pricing Market Penetration Pricing
When a company or brand wants to establish quickly in a market

Example

Psychological Pricing or odd Pricing

Retailers will often price products below a round figure e.g.:- 100 to 99.50 or 99.99

Everyday Low Pricing

Prices at a level between the normal store price & the price of the deep discount competitors.

Example

Psychological Pricing or odd Pricing

 Perception of Fairness Reduced Advertising Improved Customer Service Management

Benefits of EDLP

Reduced Stock outs and Improved Inventory Management Increased Profits Margins

Relationships Between Pricing And Value

Value

Quality

Price

Image

Value as low price, Value as whatever is wanted from a product, Value as the quality one gets for the price paid, Value as what one gets for what one gives.

Other Cost and Therefor Pricing Implications..

Consumer travel cost (petrol expenses, etc.) Parking charges Level of traffic congestion Free transit scheme Pricing mix changes Need of multi purpose visits

Why Markdown Price Policy Consider By Retailers?

Competitor activity affecting demand. Inadequate original pricing policy. Merchandise did not meet consumer needs or preferences.

Overstocking or poor stock keeping. Quality of merchandise inferior due to manufacturer or damage. Need to release the display space for other merchandise.

A policy to improve customer goodwill through markdowns. Sales staff not being properly trained or encouraged. Economic or seasonal problem.

 Value pricing Promotional pricing Low interest financing Psychological discounting Special event pricing Differentiated Pricing Time pricing Bundling

Time pricing

Value Pricing

Bundling