Many shops are part of a chain a number of similar

Many shops are part of a chain: a number of similar shops with the same name selling the same products in
different locations. The shops may be owned by one company, or there may be a franchising company that
has franchising agreements with the shop owners.
Some shops sell second-hand goods. Often the public can also sell goods to such shops. In other cases,
especially in the case of a nonprofit shop, the public donates goods to the shop to be sold. In give-away
shops goods can be taken for free.
The term retailer is also applied where a service provider services the needs of a large number of individuals,
such as with telephone or electric power.
Retail pricing
The pricing technique used by most retailers is cost-plus pricing.
This involves adding a markup amount (or percentage) to the retailers cost. Another common technique is
suggested retail pricing. This simply involves charging the amount suggested by the manufacturer and
usually printed on the product by the manufacturer.

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PRICING OBJECTIVES
Pricing objectives or goals give direction to the whole pricing process.
Determining what your objectives are is the first step in pricing.
When deciding on Pricing Objectives you must consider:
1) The overall Financial, Marketing, and Strategic objectives of the company;
2) The objectives of your Product or Brand;
3) Consumer Price Elasticity and Price Points
4) The Resources you have available.
Some of the more common Pricing Objectives are:
• Maximize long-run profit maximize short-run profit
• Increase sales volume (quantity)
• Increase market share
• Obtain a target rate of return on investment (ROI)
• Stabilize market or stabilize market price: an objective to stabilize price means that the marketing
manager attempts to keep prices stable in the marketplace and to compete on non price
considerations. Stabilization of margin is basically a cost-plus approach in which the manager
attempts to maintain the same margin regardless of changes in cost.
• Company growth
• Maintain price leadership
• Discourage new entrants into the industry
• Match competitors prices
• Encourage the exit of marginal firms from the industry

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PRICING OBJECTIVES - Contd...
• Survival
• Avoid government investigation or intervention
• Obtain or maintain the loyalty and enthusiasm of distributors and other sales personnel
• Enhance the image of the firm, brand, or product
• Be perceived as “fair” by customers and potential customers
• Create interest and excitement about a product
• Discourage competitors from cutting prices
• Use price to make the product “visible"
• Build store traffic
• Help prepare for the sale of the business (harvesting)
• Social, ethical, or ideological objectives
• Get competitive advantage
Discounts and Allowances
“Discounts and allowances are reductions to a basic price”.