Price of the product or service is one of the most ultimate and core source of revenue for retailers. It always directly connect with the image of the retail store. Consequently, retailers are constantly working hard on the pricing strategies to achieve the ultimate goal of profit margin. This post focuses on all of the pricing in the retail marketing environment. Let’s have a look:
Pricing in Retail Marketing:
Pricing is a process of taking managerial decisions to set the selling price of the product or service with considering various factors in the retail marketing environment.
The pricing process involves the various strategies, tactics, and plans such as comparative analysis, market situation, estimation and evaluation of cost to confirm or set the selling price of the product for the end users. Pricing in retail marketing may affect the factors like cost of the product, the perceived value of the consumers etc.
Factors affecting Pricing in Retail Marketing:
· Cost of Product:
In a retail environment, cost of the product doesn’t mean the manufacturing cost of the product. This cost includes the transportation charges, packing charges, shop rent, cost of promotion, taxes etc. In retail marketing, there is a channel of merchandisers involved accordingly the merchandiser’s margin is another cost which the retailers have to pay.
· Perception value of consumers:
Retailers need to consider the consumers’ perception of the value of the product or service. Also, some of the customers are more price sensitive which leads to the diminution of sales. Consumers always perceived value of the product that it should be but if it’s not according to their perception then it may influence the overall sales.
· Competition:
Competition is the main constriction that retailers are facing nowadays. If there is a monopoly in the market then the retailers can apply the premium price for the particular product. And if there is a competition in the market then retailers need to consider the price of competitor’s product while planning strategies. Also, the pricing strategies should be consistent and reliable to get a sustainable competitive advantage.
· Economic Constraints:
An economic constraint such as recession, the market slowdown can make an impact on the purchasing power of the consumers, therefore, if there is no demand the sales go down. Hence the country’s economy can directly influence the pricing policy of the product or service.
These are some of the core factors that can directly make an impact on the pricing in the retail marketing environment.
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