Marketing Communications

Chapter 11 : Merchandise Pricing

Setting the retail price

Price setting objectives
Price setting determinants

Pricing Strategies and Practices

Every day low pricing (EDLP)
High/low pricing
Coupons
Rebates
Leader pricing
Price bundling
Multiple pricing
Price lining
Odd pricing

Methods of Setting Prices

Cost oriented pricing
Demand oriented pricing
Competition oriented pricing

Adjustments to the Initial Retail Price

Markdown
Markdown Cancellation
Additional Markups
Additional Markup Cancellation

Laws Governing Retail Pricing

Chapter Summary

Price plays an important role in retailing as it explains the interrelationship between the objectives of the retail store and the components of the retail mix. A pricing strategy should help retailers earn a profit and, at the same time, benefit the customers.

In this chapter we examined how retailers sets prices. We also studied the numerous determinant of pricing. When setting the price of a product, retailers been in mind three objectives; sales objective, profit and competitive objective.

We also discussed the various pricing strategies used by retail organizations like every-day low pricing, high low pricing, coupons, rebates, price bundling, multiple unit pricing, price lining etc. After that we examined the methods of price setting: cost oriented, demand oriented and competition oriented pricing.

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