Retail Pricing

Chapter 3

Copyright 2003 by Nelson, a division of Thomson Canada Limited.

3-1

Factors Determining Price

Price is the factor which is the only source for revenue.
Store policies

Target market & demand

Retail Price

Competitors price

Economic Conditions

Chapter 3

Copyright 2003 by Nelson, a division of Thomson Canada Limited.

3-2

Retail Pricing Policies & Strategies

Cost oriented Demand oriented Competition oriented

Chapter 3

Copyright 2003 by Nelson, a division of Thomson Canada Limited.

3-3

Cost Oriented Pricing

Retail price=cost +mark up Cost=retail price-mark up Mark up=retail price-cost

Difference between the selling price and the cost is the mark up price.

Chapter 3

Copyright 2003 by Nelson, a division of Thomson Canada Limited.

3-4

Pricing Strategies

1.market skimming- high price 2.market penetration-expansionistic pricing-low price 3.price bundling:package pricing 4.leader pricing:selling one or few items in deep discounts 5.multi-unit pricing:one shirt Rs.200, two shirts Rs.300 6.every day low pricing 7.odd-pricing:99,199 8.single pricing 9.multiple pricing:discount on bulk purchase
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Chapter 3

Copyright 2003 by Nelson, a division of Thomson Canada Limited.

STP Approach
Segmentation:demographic,geographic,psychographics,lifestyle Target market:whom to cater to Positioning: positioning the product in the mind of the prospect

Chapter 3

Copyright 2003 by Nelson, a division of Thomson Canada Limited.

3-6

Retail Image
Retail image has to be created keeping the target audience in mind-the kind of environment and the services thy would like to get.

Chapter 3

Copyright 2003 by Nelson, a division of Thomson Canada Limited.

3-7

Retail Communication Mix

Sales promotion

Public relations

advertising
Retail Communication mix

Direct marketing

Personal selling

Chapter 3

Copyright 2003 by Nelson, a division of Thomson Canada Limited.

3-8

Advertising
1. 2. 3. 4. 5. Creating about the product or store Create a desire to want a product To communicate the store policies on various issues Posters and leaflets Mediums like radio,television,outdoor hoarding,internet etc.

Chapter 3

Copyright 2003 by Nelson, a division of Thomson Canada Limited.

3-9

Sales Promotion
To induce trial purchases To encourage repeat purchase To encourage larger purchases Tools: Coupons Contests Demonstrations samples Frequent shopper programmes

Chapter 3

Copyright 2003 by Nelson, a division of Thomson Canada Limited.

3-10

Personal Selling

Basic Types of Selling Approaches

1. Stimulus-Response
2. Need Satisfaction 3. Problem-Solution
Chapter 3
Copyright 2003 by Nelson, a division of Thomson Canada Limited.

3-11

Personal Selling
The Selling Process - Skills Required
Pre-Interaction Interaction Post-Interaction

Skills: Pre call Planning

Skills: Relating Need discovery Advocating Closing

Skills: Supporting Implementing Dealing with dissatisfaction Enhancing the relationship

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Chapter 3

Copyright 2003 by Nelson, a division of Thomson Canada Limited.

Personal Selling
Pre-Call Planning What do I want to accomplish?

What do I know about the prospect? Where can I find the information?
What am I going to say?

Chapter 3

Copyright 2003 by Nelson, a division of Thomson Canada Limited.

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Personal Selling
Interaction Phase
1. 2. 3. 4. 5. 6.
Chapter 3

Reducing Relationship Anxiety Needs Discovery Anticipating Buyer Questions Understanding Buyer Motives Advocating/Handling Concerns Closing the Sale
Copyright 2003 by Nelson, a division of Thomson Canada Limited.

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Personal Selling
The Approach: Reducing Relationship Anxiety
Propriety Show buyer respect; dress appropriately Know your product/service; third-party references

Competence

Commonality

Common interests, views, acquaintances

Intent
Chapter 3

Reveal purpose of call, process, and payoff to the of buyer Copyright 2003 by Nelson, a division Thomson Canada Limited.

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Point of display
Promotional signs and interior displays,often located at the point of sale or alongside display of merchandise.

Chapter 3

Copyright 2003 by Nelson, a division of Thomson Canada Limited.

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Retail store design and visual merchandising

Store design: Store Image Store Atmosphere Store Themes

Chapter 3

Copyright 2003 by Nelson, a division of Thomson Canada Limited.

3-17

Interior Store Design

Space planning:the amount of space allocated within the store for the merchandise. The location of various departments The location of various products within the deptt. Specific locations for impulse products etc. Store atmospherics:visual communication,lighting,colour,music, Aesthetics:size,colour,texture(feel within the store) Fixtures Flooring and ceiling Lighting Graphics and Signages-theme graphics,campaign graphics, promotional graphics
Chapter 3
Copyright 2003 by Nelson, a division of Thomson Canada Limited.

3-18

Types of Layout
Grid layout: Mostly used in supermarket and discount stores while one area of display is along the walls of the store and the other merchandise is displayed in the parallel manner Racetrack layout:loop layout. Department stores Freeform layout:it allows free movement ,often used in Department stores to encourage the people browse the shop.

Chapter 3

Copyright 2003 by Nelson, a division of Thomson Canada Limited.

3-19

Planogram
Helps to determine the location within a store
Diagrams of how to exhibit selections of merchandise within a store

How displays has to be done

Chapter 3

Copyright 2003 by Nelson, a division of Thomson Canada Limited.

3-20

Visual Merchandising
Termed as the orderly,systematic,logical and intelligent way of putting stock on the floor SKU planning,store windows and floor displays,signs,space design,fixtures, mannequins etc.

Chapter 3

Copyright 2003 by Nelson, a division of Thomson Canada Limited.

3-21

Methods of Display
Colour dominance Co-ordinated presentation Presentation of price

Chapter 3

Copyright 2003 by Nelson, a division of Thomson Canada Limited.

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