Chapter 17 Darwin Etang

7/25/2019 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

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Chapter 17 Darwin Etang