Product Pricing Methods What you’ll learn to do: Use various pricing methods to determine product pricing We’ll go into a bit more depth on the math of a cost-oriented approach to retail pricing. First, we will learn more about the three components of retail pricing math: cost, markup percentage, and retail price. Additional components will then need to be considered in order to perform a break-even analysis, and we will explore… Read More »Product Pricing Methods

Price Elasticity Calculations Remember, elasticity measures the responsiveness of one variable to changes in another variable. In the last section we looked at price elasticity of demand, or how much a change in price affects the quantity demanded. In this section we will look at both elasticity of demand and elasticity of supply. Supply can also be elastic, since a change in price will influence the quantity supplied. In order to measure elasticity, we… Read More »Price Elasticity Calculations

Price Elasticity Elasticity is a classic economic principle that helps us understand how much a change in price will affect market behaviors. If we make a change in price, how will that impact the demand for the product? Price elasticity is the measure of the market’s response to price changes. Elasticity is important to pricing decisions because it helps us understand whether raising prices or lowering prices will enable us to achieve our business… Read More »Price Elasticity

Pricing Strategies Our discussion of retail pricing strategies has so far covered some important high-level concepts. We started with the basic principles of value and markup. We then explored some common methods of pricing a retailer can employ: keystone, premium, discount, psychological, bundle, and tiered. That was followed with a discussion of how pricing is part of the overall retail mix and the 6 P’s. Finally, we touched on some… Read More »Pricing Strategies

Pricing Objectives What you’ll learn to do: Explain how retailers determine pricing objectives We will examine the connection between retail pricing strategies and retailer’s business models/objectives in this section. In addition to thinking like retailers, we will take a step back to examine some general economic principles that retail businesses must understand and contend with. LEARNING OUTCOMES List some external factors that impact retail pricing Match various pricing strategies with the… Read More »Pricing Objectives

Pricing and the Retail Mix At the beginning of this module, we state that retail pricing strategy does not exist in a vacuum and is dependent and interrelated to other business factors. Retailers have used the “Six P’s of Retail” model to visualize how various combinations of these factors combine to form the right “mix” for the business. Each retailer works to create their own unique formula for success, but… Read More »Pricing and the Retail Mix

Retail Pricing Strategies As we stated earlier, there are a large number of retail pricing strategies and methods. We will discuss a number of them in this section. One major common denominator that runs through all of the pricing decisions made by retailers is the concept of “markup”. Markup is simply the difference between the cost of the product to the retailer and the price at which the product is… Read More »Retail Pricing Strategies

Pricing in Retail What you’ll learn to do: Identify how pricing fits into the goals of a retail establishment We will take our candy store scenario a little further in this section as we learn about the definition of value, some basic retail pricing strategies we are probably all familiar with, and how pricing is an integral part of the retail mix strategy. LEARNING OUTCOMES Define value Differentiate between basic retail… Read More »Pricing in Retail

 Retail Pricing and Sales Strategies The term “pricing” is one of the four “P’s” we learn in classic product marketing. In the marketing world, product, promotion, placement, and pricing are the four categories that must be addressed and executed for a successful product lifecycle. Although there is obvious carryover from classic marketing to retail marketing, pricing takes on a different level of importance for the retailer. This may be why… Read More »Retail Pricing and Sales Strategies

Putting It Together: Merchandise Management In this section, we have delved into the nuts and bolts of retail merchandise management- a topic at the very heart of the retail business. We started with a discussion of the organization and function of retail buying organizations. We broke down the primary roles of Buyer, Planner, and Operations personnel, saw how their responsibilities differ, and how they work together on merchandise planning. We… Read More »Putting It Together: Merchandise Management