This document discusses retail pricing strategies. It begins by defining retail pricing as an integral part of the retail marketing mix that generates revenue and communicates a store's image. Key factors to consider include demand, store policies, competition, and economic conditions. Pricing objectives should be in agreement with the store's mission and merchandising policies. Developing a pricing strategy involves considering costs, demand factors, and competition. Common approaches discussed are market skimming, penetration pricing, leader pricing, bundling, multi-unit pricing, and everyday low pricing.

1. RETAIL PRICING
PRESENTED BY
EMMANUAL JOSE

2. CONCEPT OF RETAIL PRICING
 Integral part of retail marketing mix
 Source of revenue for the retailer
 Communicate the image of the retail store
FACTORS THAT NEED TO BE TAKEN INTO CONSIDERATION
 Demand for the product and target market.
 Store policies and the image to be created
 Competition for the product and the competitor’s price
 Economic condition prevailing at the time
PRICING OBJECTIVE
 In agreement with the mission statement
 In agreement with the merchandising policies

3. ELEMENTS OF RETAIL PRICING
 Cost of goods :cost of merchandise expenses incured towards
transportation Taxes ,duties levies etc.
 Expenses :fixed expenses,variable expenses
 Fixed expenses :expenses that do notry with quantum of business.eq.shop
rent,head office costs etc.
 Variable expenses:level os sales directly effects variable expenses.
eg:.merchandise margins,product mix costs their management either
enhances or destroy profitability
DEVELOOPING PRICING STATEGY
1. Cost oriented
2. Demand oriented
3. Competition orirnted

4. COST ORIRNTRD PRICING
 Basic mark up is added to the cost of merchandise
 Retail price is considered to be a function of the cost and the mark up
Thus retail price = cost+mark up
Or cost = retail price-mark up
Or mark up = retail price-cost
Different between the selling price and cost id mark up
Mark up should cover for operating expenses and transportation etc.

5. DEMAND ORIRNTED PRICING
 Focus on qualities the customers would buy at various prices
 Largely depends on perceived value attached to the product
by customers
 Sometimes a high priced product is percieved to be of high
quality
 sometimes a low priced product is perceived to be of inferior
quality
KEY TO DEMAND ORIRNTED PRICING
 Understanding of the target market
 Value based proposition that they would look for

6. COMPETITION –ORIRNTED PRICING
 Competition is the criteria of fixing the price
 Competitors play a key role in determining price
 Retailer fixes price on per with the competitors
 Retailer fixes price above the competitor’s price
 Retailer fixes price below the competitor’s price

7. IMPORTANT TERMS USED BY RETAILERS IN PRICING
 Price Lining : when retailers sell merchandise only at a given price
 Price zone or price range : range of prices for a particular merchandise line
 Price point : a specific price in that price range

8. APPROACHES TO PRICING STRATEGY
 Market skimming
 Market penetration
 Leader pricing
 Price bundling
 Multi unit pricing
 Discount pricing
 Everyday low pricing
 Odd pricing

9. MARKET SKIMMING
 Strategy to charge a high price initially
 Gradually reduce it if necessary
 Policy is a form of price discrimination over time
 MARKET PENETRATION
 Opposite of market skimming
 Aim to capture a large market share by charging low price
 Low prices stimulate purchases
 Low prices discourages competitors fron entering the market
 Economies of scale is required in manufacturing or retail to be effective

10. LEADER PRICING
 Retailer sells the items at deep discounts
 This increases traffic and sales on complementary items
 The product must appeal to a large number of people
 The concept should appears as a bargain
 Items best suited for this type of pricing are those that are bought frequently
 Example: bread,eggs,biscut,milk etc.
PRICE BUILDING
 Retailer bundles a few products and offers them at a particular price
 Price bundling helps sale of related items
 Example: A PC at a fixed price including a printer and web camera
Value meal offered by Mc Donalds

11. MULTI UNIT PRICING
 Retailer offers discounts to customers who buy in large qualities or who buy
a product in bundle
 This involves value pricing for more than one of the same item
 Multi unit pricing helps move products that are slow moving
 Example: offer price of one T-shirt for rs.255.99 and two T-shirt for
rs.355.99
DISCOUNT PRICING
 Used as a strategy by outlet stores who offer merchandise at the lowest
market prices.

12. EVERY DAY LOW PRICING
 Popularly known as EDLP
 Strategy adopted by retailers who continually price their products lower
than the other retailers in the area
 Example: Food Bazaar,Wal-Mart and Toy’s ‘R’U’s regularly use this
strategy
ODD PRICING
 Strategy is to set retail prices in such a manner that the price ends in odd
numbers
 Example : Rs,99.99,Rs.199.99 or Rs. 299.99

13. THANK YOU