The price of a product is vital for a retailer. It determines profit and is one of the main marketing mix tools. As a result, retailers should be very careful by choosing the pricing strategy to achieve a benefit goal. They must design a good pricing strategy for trademarks, categories, stores and private markets. Before determining the retail pricing strategy to be used to establish the right price, we need to know the costs associated with products. Two key elements of factoring products costs are the cost of goods and operating expenses. Goods costs include the price paid for the product, as well as shipping and handling expenses. The cost of operating expenses includes overhead, payroll, marketing and office supplies. To succeed in business, retailers must assess their distribution channel and market potential research.
Product prices depend on retailers’ strategies. To introduce a new product, the retailer can opt between the operating promotions and the low pricing at the initial stage until the demand increases for the product on the market. To maintain decent profit, retailers can use “the suggested retail price” (PDSF) and to avoid price wars. Retailers are considering a “competitive pricing strategy” must have competitive prices and provide exceptional customer service over competition.
Prior to the pricing product, retailers should consider the location, exclusivity and / or single customer service that would help justify higher prices. Some of the supermarkets are usually located in places where families of the upper class reside. In such localities, the retailer can charge higher prices for products because the families of the higher class would buy brand products even when the price is a little high. Therefore, the retailer must know the behavior of the consumer.
Retailers would give customer discount offers based on the type of targeted client and the type of proposed item. Example: The retailer can offer cash as a reward for customers who pay money quickly or in time, to reduce the quantity to the buyer of large volumes, at the seasonal delivery to customers who buy the Season and bill less when the customer buys a package or several linked. Articles together.
Some of the retailers assumed that they can earn their competitors on the market by fixing a low price. However, the lowest pricing strategy does not allow retailers to achieve long-term benefits. It is preferable that retailers avoid the low pricing strategy and start reviewing the demand on the market by examining three factors:
Competitor Award: Retailers should review prices, costs, market price, discount offers and promotions to compete with their competitors.
Ceiling price: The retailer should not solve the price of the ceiling price because the ceiling price is the highest price as the market is. If the price of the product is greater than the ceiling price, customers will not be able to buy such products.
Elasticity of demand prices: Taking effective decisions, retailers should accurately predict market demand. As demand is intrinsically linked to the price, price elasticity is an essential calculation for current retail marketers.
Retailers should consider few factors before setting the price to their products in accordance with the locality, customer preference and the standard of life of customer and brand preferences. Smart use of pricing strategies can achieve optimized benefits and revenues.