07 Selecting Price Level and Pricing Adjustments

07 Selecting Price Level and Pricing Adjustments -...

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Selecting a Price Level - competition oriented approaches o customary pricing o above/at/below marketing pricing below: not losing money, but pricing below the average market price o loss leader pricing even though you’re losing money by pricing so low, when they come to buy the product, they’ll buy other products in your store; the main point is to attract consumers to your store retailers aren’t the only ones doing this, also in the fashion industry (WSJ article) it’s not the really expensive dresses and bags on the runways, it’s the PR given by publicity, most profit is made by cheaper stuff (perfume); losing money on dresses, etc, since no one is buying; you want your name to be discussed; perfume is the cheap way to enter fashion industry; people are likely to buy as it costs a little but makes them feel like “a million dollars” Pricing Strategies: “Special adjustments”: managerial considerations - one price vs. flexibility o Walmart is one price all the time o Flexibility: sale pricing, 2 for 1, etc.; low and raise it in market conditions;
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  • Summer '07
  • Marketing, Pricing, average market price, LOSS LEADER PRICING, competition lowers price

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