1. PRICING OBJECTIVES

2. Pricing Strategies
• Once businesses know the
minimum price they can
charge they will develop a
pricing strategy
– A plan to price a product to
achieve specific marketing
objective
• There are 3 main Pricing
Strategies
– Market Skimming
– Penetration Pricing
– Competitive Pricing

3. Pricing Method
• Value Pricing
• Promotional Pricing
• Loss-Leader Pricing
• Special Event Pricing
Other pricing strategies:
Buy more, save more
Prices reduced on a combination
Holding special discounts
Highlighting the savings possible
The Price Challenge Offer
Advertising
Advertising is the essential component of brand building . the advertisement is done
through various ways, techniques used are:
Tag-line
 Print-ads
 TV-ads
 Road side hoarding
 Radio ads
Fashion shows
 Brand endorsement by celebrity.

4. Use of Advanced Technology
Product Life Cycle
Product Complexity
Channels of Distribution
Quality Requirements
Product Diversity
0
100
1 2 3 4
Composition of Cost
Direct Material Labour Overheads

5. Conventional Costing
Expenses
Cost Objects
AB Costing
Resources
Activities
Cost Objects
Economic
Element
Work
Performed
Product or
service
Total Cost
(Material + Labour+
Overheads)

6. Business Level Strategies
Two Generic Business Level Strategies
Cost Leadership:
• generate economic value by having lower costs
than competitors
Product Differentiation:
• generate economic value by offering a product
that customers prefer over competitors’ product
Example: Wal-Mart
Example: Harley-Davidson

7. Value of a Cost Advantage
Rivalry
Entry Buyers
SuppliersSubstitutes
• increases capital
requirements
for entrants
competitors rationally
avoid price competition
• limits
attractiveness
of substitutes
• increases
importance of the
focal firm to the
supplier
• lowers incentives
for buyers to
vertically
integrate

8. Production
Finance
R&D
Accounting Marketing
Human
Resources
Chief Executive Officer
Functional Structure
Organizational Structure

9. Mission / Vision / Positioning And Establishment
 VISION
Future Group shall deliver Everything, Everywhere, Every time
for Every Indian Consumer in the most profitable manner.
 MISSION
We share the vision and belief that our customers and
stakeholders shall be served only by creating and executing
future scenarios in the consumption space leading to economic
development.
Customers Segmentation
Big Bazaar targets higher and upper middle class customers.
 The large and growing young working population is a
preferred customer segment.
 Big Bazaar specifically targets working women and home
makers who are the primary decision makers.

10.  Swot Analysis
Physical
Evidence
People
Place Promotion
Price
Product
Process
7 ‘P’ Marketing Mix

11. DEVELOPMENT AND EVOLUTION OF RETAIL
Traditional
Daily Reach
Govt. Support
Modern
Formats
Weekly Markets
Village Fairs, Melas
Local Kiranas
PDS
Cooperatives
Hypermarkets,
Supermarkets,
Departmental Stores etc
Shopping &
entertainment
Neighborhood &
Convenience
Low Price
Shopping
experience&
efficiency
Rural Retail Adhaar, Hariyali etc New Experience

12. 1) Identifying a Target Market
2) Selecting a Product Strategy
3) Selecting a Customer Service Strategy
4) Selecting a Pricing Strategy
5) Choosing a Location
6) Building a Promotional Strategy
7) Creating a Store Atmosphere
How Retailers Compete
Retail Locations
 Planned Shopping Center
 Shopping Mall
 Regional Mall
 Lifestyle Mall

13. Employee Type & Density
Merchandise Type & Density
Fixture Type & Density
Sound
Odors
Visual Factors
Factors in Creating
Store’s
Atmosphere
How many
How knowledgeable
How helpful / invasive
Fit the image of the product
Good personal sellers
Factors in Personal
decisions

14. Areas of Retail Operation covered
• Check out Management
• Stores Administration & Facilities Management
• Loss ( Shrinkage ) Prevention.
• Visual Merchandising and Displays.

15. Stores Operating Parameters- Stocks
• Avg. Selling Price
Total value of goods sold Total Qty. Sold
• Avg. Stock Price
Total value of goods in stock Total Qty. in stock
• Stock Turnover/ Inventory Turnover Ratio
Net Sales Avg. Retail value of inventory
• Percentage Inventory Carrying Cost
(Inventory Carrying Cost Net Sales) * 100

16. Stores Operating Parameters- Stocks
• Gross Margin Return on inventory
Gross Margin Avg. Value of Inventory
• Mark Down Goods Percentage
(Net Sales at Mark Down Total Net Sales) * 100
• Shrinkage to Net Sales
(Actual Inventory – Booked Inventory)
-------------------------------------------------- * 100
Net Sales

17. Stores Operating Parameters- Employees
• Gross Margin per full time employee
Total Gross Margin Total no. of FT employees
• Suppliers /Quantity or Value purchased per buyer
Total Suppliers /Quantity or Value purchased Total no. Buyers

18. Cash Register Express
Cash Register Express (or CRE) is a
cost-effective computerized cash register
that keeps your inventory costs down,
reduces theft and makes more money!
CRE is Windows-based POS system
exclusively for retail and video stores.
Features :
Easy to use:
Fast lookups by barcode or name
Built-in help system Bar-code ready
Credit card processing with IC Verify
Built-in backup
Salesperson tracking Time clock
Handles multiple clerks
Handles multiple cash drawers
Password protection
Check out Management

19. Broad compatibility
Microsoft Access compatible
Quickbooks compatible
Helps manage customer accounts
Detailed customer history
Customer quick search
Promotions for preferred customers
Family memberships
Coupon plans
Gift certificates
Mailing labels
Management flexibility
Flexible pricing
Flexible taxing
Sophisticated reporting
Detailed inventory reports
Management reports
Financial summaries
Check out Management

20. Assessing and responding to a competitor’s price cut (depending
on the market structure)

21. • Factors that we expect to affect the demand for the good include:
Population (n)
Price of the good (pi)
Price of other goods (pj)
Income (y)
• Expectations of future prices
Tastes (T)

22. Pricing Strategies
Value Pricing

23. Contribution Pricing
• Contribution = Selling Price – Variable (direct costs)
• Prices set to ensure coverage of variable costs and a
‘contribution’ to the fixed costs
• Similar in principle to marginal cost pricing
• Break-even analysis might be useful in such
circumstances

24. Cost-Plus Pricing
• Calculation of the average cost (AC) plus a
mark up
• AC = Total Cost/Output