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r Retail Pricing strategy, in some
industries, has a great deal of impact on
sales volume

r It is often possible to attract more

customers to your retail store and sell
more merchandise if your pricing strategy
on some items are somewhat lower than
those of your competitors.

r For example, if you are selling 75 units

per week at $1.60 gross profit per unit,
your total weekly profit is $120. This is the
equivalent of selling 100 units at $1.20
each.
Various pricing strategy followed by the retailers

(A) Every day low pricing (EDLP)

r Popular method used by Retailers like wal-mart

and Big Bzar

r Goods sold below the MRP printed in the

pack or some promotional shames is available

r For EDPL to work, volumes are very

necessary so that retailers can negotiate with
manufacturer for bargaining price.
(B). High ʹ Low praising

Retailers offer price that are sometimes above

their competitors EDLP But they use ads to
promote frequent sales

Then they will reduce the price at the end of off

season to clear the stock
Eg: Textiles shops ʹ lifestyle

A special sales is organized

a) Goods that have not managed to sold are

disposed off.
b) Provide an opportunity for different target
segment to visit the store
(c) Loss leader pricing

r Retailers charge lower price to some fast moving

product to attract customers to the store

r Once the customer are in store they can be

persuaded to by more profitable product.

r E.g. Retailers charge low price to eggs compared

to competitors. Customer will purchase bred,
milk, flour.etc..along with eggs which are priced
slightly high.
 (D) Skimming Pricing strategy

r Retailer charging relatively high price for product at

first, then lowers the price time.

r It allows the firm to recover its sunk cost quickly

before competition steps in and lower the market
price.

(E) Penetrating pricing

r Initially charging low price to catch

attention of customers and attaining brand
loyalty
(F) Multiple unit pricing

r Retailers use multiple unit pricing to encourage

additional sales and to increase profit.

rThe gross margin that is sacrificed in a multiple

unit sales is more than off-set by the savings that
occur from reduced selling and handling
expense.

(G) Bundle pricing

r Retailer offering a bundle of good in a

package with a product of grate demand

r Grouping Jeans with T- Shirt to promote sales

of slow moving T- shits
(H) Demand oriented pricing

r Fixing price based on demand

r Availability of product leads to changes in demand

(I) Fixed and variable pricing

r Only variable cost is taking to consideration

r Cretan % of operation charge is adding with

cost of product
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