Merchand|se r|c|ng

SeLLlng Lhe 8eLall rlce

W rlce ls Lhe only reLall mlx elemenL LhaL
generaLes lncome
W ueclslon makers should seL Lhe prlce keeplng
lnLo conslderaLlon sLores ob[ecLlves and
cusLomers expecLaLlon
W rlce ls one of Lhe facLors deLermlnlng Lhe
sLores lmage
rlce SeLLlng Cb[ecLlves
W rlce plays a ma[or role ln aLLracLlng and
reLalnlng cusLomers
W Whlle seLLlng Lhe prlce need of Lhe cusLomers
should be consldered
W rlclng should be ln llne wlLh Lhe flrm's
mlsslon merchandlslng pollcles and oLher
sLore declslons
W All Lhese polnLs can be classlfled as
rlce SeLLlng Cb[ecLlves
W Sales Cb[ecLlves
W roflL Cb[ecLlves
W CompeLlLlve Cb[ecLlves
Sales Cb[ecLlve
W rlclng ln dlrecLly relaLed Lo Lhe volume of
producLs whlch are geLLlng sold by Lhe reLaller
W volume ln Lurn affecLs Lhe LoLal revenue and
proflL of Lhe sLore
W Pence Sales Cb[ecLlve can be expressed ln Lwo
ways
W Sales volume Cb[ecLlvesalms Lo achleve Lhe
fuLure sales LargeL of Lhe reLall sLore as well as Lo
malnLaln Lhe exlsLlng level of sales of Lhe sLore
W MarkeL Share Cb[ecLlvesalm Lo lncrease and
malnLaln Lhe markeL share
roflL Cb[ecLlve
W roflL ob[ecLlves are seL ln Lerms of proflL
maxlmlzaLlon LargeL reLurn on lnvesLmenL and
neL sales
W 8eLaller Lrles Lo maxlmlze Lhe proflL of hls
reLall sLore Lhrough prlclng and oLher
merchandlse acLlvlLles
W Worklng Lo achleve Lhls ob[ecLlve ln long run
can sLraln Lhe cusLomer relaLlons
CompeLlLlve Cb[ecLlves
W A reLaller pursues varlous compeLlLlve
ob[ecLlves llke meeLlng compeLlLors prlces
prevenLlng an lncrease ln compeLlLors or
worklng Lowards non prlce compeLlLlon
rlce SeLLlng ueLermlnanLs
W Some reLallers seL Lhelr prlce by followlng Lhe
prlclng of Lhelr ma[or compeLlLor or Lhe
markeL leader
W Some reLallers keep Lhelr prlces low
lnLenLlonally Lo keep Lhe compeLlLlon low
W Whlle seLLlng Lhe prlce of Lhe merchandlse
reLaller should bear ln mlnd cerLaln facLors
LhaL affecL Lhe demand of goods and servlce
rlce SeLLlng ueLermlnanLs
W uemand lacLor
W CompeLlLlon lacLor
W CosL lacLor
W roducL lacLor
W Legal lacLor
uemand lacLor
W 8elaLes Lo law of demand
W 8eLaller should do an assessmenL of consumer
demand for parLlcular producL aL dlfferenL
prlces
W Measure Lhe prlce elaslLlclLy of demand
W LlasLlc demands refers Lo cusLomer senslLlvlLy
Lowards prlces
W Also should conslder Lhe cross elasLlclLy of
demand
CompeLlLlve lacLor
W Success of reLall prlclng sLraLegy depends upon lLs
ablllLy Lo glve Lhe sLore advanLage over lLs
compeLlLors
W MonlLor Lhe prlce seL by Lhe compeLlLor
W varlaLlon of prlces should reflecL Lhe quallLy of
servlce and oLher reLall mlx elemenLs
W uepends upon Lhe compleLlve poslLlon of Lhe
reLaller ln Lhe markeL
W CompeLlLlve poslLlon ls based on Lhe reLall mlx
cusLomer base and sLore lmage eLc
CosL lacLor
W Pas a ma[or lnfluence on prlclng
W 1oLal cosL of sLore lncludes cosL of
merchandlse plus Lhe cosL of oLher facLors on
reLall mlx
roducL lacLor
W naLure of Lhe producL lnfluences Lhe prlclng
sLraLegy
W erlshablllLy uurablllLy and Seasonal naLure of
Lhe producL plays an lmporLanL role on Lhe
prlclng sLraLegy
W ln reLall goods Lhere are Lhree Lypes of
perlshablllLy
W hyslcal erlshablllLy(hyslcal deLerloraLlon of goods)
W SLyle or lashlon erlshablllLy(AccessorlesApparels)
W Seasonal erlshablllLy(Woolen CloLhs lrulLs and vegeLables)
Legal ConslderaLlon
W rlclng acLlvlLy almed aL resLrlcLlng or kllllng
Lhe compeLlLlon ls prohlblLed
W CuallLy and AvallablllLy of producL also
lnfluence Lhe prlclng sLraLegy of Lhe reLaller
rlclng SLraLegles and racLlces
W Lvery uay Low rlclng
W PlghLow rlclng
W Coupons
W 8ebaLes
W Leader rlclng
W rlce 8undllng
W MulLlple unlL rlclng
W rlce Llnlng
W Cdd rlclng
Lvery uay Low rlclng
W 8eLallers who follow Lhls sLraLegy slmply Lry Lo
keep cosLs low and sell more merchandlseAnd
can even lower Lhe prlces on varlous occaslons
W 8eLallers LhaL follow LuL sLraLegy carry a large
number of lLems buL a smaller selecLlon of
brands
W 1hls sLraLegy appeal Lo cosL consclous buyer
W LuL resulLs ln cusLomers buylng large quanLlLy
of merchandlse
Plgh Low rlclng
W 8eLallers whlle uslng Lhls sLraLegy charge hlgher
Lhan LuL reLallers
W Such reLallers occaslonally reduce Lhelr prlces
deeply
W 8eLall SLores whlch follow Lhls sLraLegy provldes a
hlgh flxed uLlllLy Lo cusLomers wlLh a convenlenL
formaL hlgh quallLy servlce and a good
assorLmenL of producLs
W Slnce prlce ofLen flucLuaLes ln such sLores
cusLomers defer Lhe purchase of hlgh prlced
producL Llll Lhe prlce falls
Coupons
W Coupons are documenLs LhaL enLlLle Lhe holder Lo
a percenLage prlce reducLlon from Lhe acLual
purchase prlce of a producL or servlce
W 1he reLaller or Lhe manufacLurer lssues Lhls
coupons ln news paperwlLh Lhe producLs aL Lhe
cash reglsLer or Lhrough mall
W Coupons lnduce people Lo Lry parLlcular lLems or
merchandlse sold by a sLore
W Coupons have a mlxed lmpacL on reLall sLores
8ebaLes
W ln rebaLes a porLlon of Lhe purchase prlce ls
refunded Lo Lhe buyer
W 8ebaLe can be done boLh aL Lhe reLaller as well
as aL manufacLurer's end
W AfLer Lhe purchase cusLomer has Lo send Lhe
proof of purchase Lo Lhe manufacLurer
W upon recelpL of Lhe proof of purchase Lhe
manufacLurer malls Lhe rebaLe Lo Lhe
cusLomer
Leader rlclng
W Leader rlclng lnvolves selllng a producL(leader)
aL a subsLanLlally low prlce Lo generaLe cusLomer
Lrafflc and lncrease Lhe sale of complemenLary
producLs ln Lhe sLore
W 8eLallers call Lhe producL whlch ls sold aL lower
prlce as loss leader
W rlces need noL always be lower Lhan cosL prlce
W roducL selecLed for leader prlclng should be
Lhose LhaL are frequenLly boughL by LargeL
cusLomers
rlce 8undllng
W ln prlce bundllng dlsLlncL lLems generally
from dlfferenL llnes of merchandlse are
offered LogeLher aL a speclal prlce
W 1hls helps ln lncreaslng Lhe sale as well as
Lrafflc ln Lhe sLore
W Also helps ln removlng Lhe less deslrable
merchandlse from Lhe sLore
MulLlple unlL rlclng
W MulLlple unlL prlclng occurs when Lhe prlce of
each unlL ln a mulLlpleunlL package ls less Lhan
Lhe prlce of each unlL lf lL were sold lndlvldually
W Ceneral merchandlse and Apparel reLallers
commonly use Lhls mulLlple prlclng sLraLegy
W MulLlple unlL prlclng lncreases Lhe sales volume
as well as proflL of Lhe sLore
W 1hls sLraLegy can also be used Lo clear ouL goods
rlce Llnlng
W rlce Llnlng lnvolves esLabllshlng a speclflc
number of prlce polnLs for each merchandlse
classlflcaLlon
W Lach prlce llne helps Lhe cusLomers by reduclng
shopplng confuslon and maklng lL easy Lo ldenLlfy
prlce ranges LhaL sulL Lhem
W lL helps ln pro[ecLlng Lhe depLh of merchandlse
W Lgklds wear prlced aL 8s3308s730 and 8s930
W 1he prlce dlfference should be slgnlflcanL for Lhe
cusLomers Lo relaLe Lhe value dlfference
Cdd rlclng
W Cdd prlclng refers Lo Lhe pracLlce of seLLlng
reLall prlces LhaL end ln an odd number or [usL
under an even rupee value
W 1hrough odd prlclng reLallers Lry Lo make
cusLomers feel LhaL Lhey are paylng less for
Lhe merchandlse
W Lg rlces llke 8s9998s29993 eLc
MeLhods of SeLLlng rlces
W CosL CrlenLed rlclng
W uemand CrlenLed rlclng
W resLlge rlclng
W CompeLlLlon CrlenLed rlclng
CosL CrlenLed rlclng
W ln Lhe cosL orlenLed prlclng approach a
reLaller seLs a mlnlmum prlce LhaL ls necessary
for Lhe sLore Lo achleve a predeLermlned
proflL goal
W ln deLermlnlng Lhls prlce Lhe reLaller usually
compuLes merchandlse and reLall operaLlng
cosLs and adds a proflL margln Lo Lhese
flgures
1ermlnologles
W ln Lhe cosL orlenLed approach Lhe reLaller
uses Lhe ark up techn|que Lo calculaLe Lhe
reLall selllng prlce
W 1he dlfference beLween Lhe cosL of Lhe
merchandlse and Lhe reLall selllng prlce ls
known as the arkup
W Mark ups can be of Lwo Lypes(1) 8upee
Markup and (2) ercenLage Markup
W Mark up percenLage can be calculaLed boLh aL
Lhe cosL prlce and aL selllng prlce
W 8uL slnce Lhe selllng daLa ls easlly avallable lL ls
preferred Lo conslder a markup percenLage on
Lhe selllng prlce
W lnlLlal Mark up ls deflned as Lhe lnlLlal reLall
selllng prlce based on Lhe merchandlse less Lhe
cosL of merchandlse sold
W MalnLalned Mark up ls Lhe acLual prlce recelved
for merchandlse sold less Lhe merchandlse cosL
W Cross Margln ls Lhe dlfference beLween Lhe neL
sales and Lhe LoLal cosL of goods sold
uemand CrlenLed rlclng
W rlce are flxed on Lhe basls of demand
W 1hls sLraLegy works backwards
W 8eLaller conslders a range of prlces and
evaluaLes Lhe besL flL
W 1hls ls a more aggresslve way of prlclng
W used Lo galn markeL share and compeLlLlve
edge
resLlge rlclng
W lL relaLes Lo Lhe psychologlcal effecL
W Plgh prlced producL ls percelved Lo be a hlgh
quallLy producL and vlce versa
W resLlge prlclng ls based on Lhe assumpLlons
of producL quallLy relaLlonshlp
W Lspeclally LargeLed for less prlce senslLlve
segmenL
W 1he cusLomers relaLes Lhe producLs wlLh Lhe
sLaLus
CompeLlLlon CrlenLed rlclng
W rlces are flxed on Lhe basls of compeLlLors
prlce
W CosLdemandquallLy ls noL consldered whlle
flxlng Lhe prlce
W Any change ln Lhe above does noL affecL Lhe
prlce
W 1he prlce seLLlng can be done aL prlce lower
Lhan Lhe markeL prlce
lacLors affecLlng cusLomer's senslLlvlLy
Lo prlce
W Awareness abouL Lhe subsLlLuLes (larger Lhe no
of subsLlLuLes more Lhe prlce senslLlvlLy)
W volume of expendlLure (Plgher Lhe volume ln
Lerms of moneLary valuemore ls Lhe prlce
senslLlvlLy)
W ulfflculLy ln comparlson (easler Lhe comparlson
avallablemore ls Lhe prlce senslLlvlLy)
W 8eneflL/rlce relaLlonshlp (Plgher Lhe
8eneflLlower ls Lhe prlce senslLlvlLy)
W SlLuaLlon (8uylng slLuaLlon and aLmosphere
changes Lhe spendlng paLLern)
Ad[usLmenL Lo Lhe lnlLlal 8eLall rlce
W MarkdownlL ls a reducLlon from Lhe orlglnal
reLall prlce of an lLem Lo maLch Lhe lower prlce
offered by compeLlng reLallers
W 1o reduce Lhe merchandlse ln Lhe
sLore(clearance)
W 1o aLLracL more Lrafflc flow and generaLe
sales(promoLlon)
W Pelps Lhe reLaller ln sLaylng compeLlLlve
W LlquldaLlon of Markdown Merchandlse
Markdown CancellaLlonA markdown cancellaLlon
refers Lo Lhe amounL by whlch Lhe reLall prlce ls
ralsed afLer Lhe markdown was announced
AddlLlonal MarkupsAn addlLlonal markup refers Lo
an lncrease ln Lhe reLall prlce afLer Lhe lnlLlal
markup percenLage has been applled 1hls klnd of
markup depends upon Lhe elasLlclLy of Lhe
producL
W AddlLlonal Markup CancellaLlon1hls happens
due Lo a severe compeLlLlon ln Lhe markeL