Are Retail Pricing Strategies Out of Control?

Recently, we wrote about many restaurants making their menus too complicated, thus leading to significantly slower service and too many choices.
Now, we have a related question: Do some retailers offer too many prices for their product assortment? In many cases, the answer is yes.
As reported by Tom Ryan for RetailWire:
According to a survey by Software Advice, 52 percent of retailers use more than 10 pricing tactics, although most revolve around a strategy of discounting. The study questioned retailers about their experiences with 13 different pricing approaches and found only two percent used two or fewer pricing tactics. The top eight were:”
1. Discount — “Discounts based on either product quantity, customer loyalty or tied to specific promotions.” 2. Bundle — “Multiples of the same product are sold together for a single price, typically lower than purchased individually.” 3. Below competition — “Products priced lower than the closest competitor pricing.” 4. MSRP (manufacturer’s suggested retail price) — “Designed to maintain the manufacturer’s margins and brand perception.” 5. Odd pricing — “Ending prices in odd figures, such as 99 cents, for a psychology play on consumers.” 6. Price lining — “Prices set to create distinct categories of products, signaling a level of quality to the customer.” 7. Dynamic — “Prices change based on the willingness of the customer to pay.” 8. High-low — “Most products are priced above market rate with discounts offered on select items to attract customers.”
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This entry was posted in Part 2: Ownership, Strategy Mix, Online, Nontraditional, Part 3: Targeting Customers and Gathering Information, Part 6: Merchandise Management and Pricing and tagged , , , , , , , , , , . Bookmark the permalink.

2 Responses to Are Retail Pricing Strategies Out of Control?

  1. Pingback: Are Retail Pricing Strategies Out of Control? |...

  2. Pingback: Do YOU Know When It Is OK to Raise Prices? | Retailing: From A to Z by Joel Evans

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