Pricing in Retail Marketing. MBA Marketing study material.

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.

Merchandising in Retail Marketing. MBA Marketing study material.

From at the beginning of choosing specific products to sell, buying it in wholesale till the end of the process by resale it to the end users and make a profit is a model of merchandising in the retail marketing environment.  Merchandising is a common practice of every set of business where products are displaying and selling to the end users. To influence the consumers and increase the sales volume is the main function of merchandising, whether it’s digital or in-store.

Merchandising:

“It is a process of offering a right product, with a right quantity, in right place, at right time to the right person to meet the organization’s financial goal”

Merchandiser:

“A person whether a wholesaler or a retailer, who buy the products or goods from the several sources for resale to the end users to make a profit is called as a merchandiser”.

Merchandiser always bond to a higher standard of duty of care as he supposed to have expert knowledge about products he engaged in.

Role of Merchandiser:

A merchandiser typically responsible for-

Planning and Forecasting:

Selecting a product category and Forecasting the budget and sales in the selected area.

Leading and Sourcing:

Leading and guiding the team and searching for various appropriate sources to purchase the products. Making a purchase order with suppliers.

Maintaining budget:

Making sure about the cost of products and budget planned. Work on the cost of the products

Co-ordinating and Controlling:

Co-ordinating with the suppliers about the shipment and controlling the stock or inventory purchase.

Evaluating Sales:

Analysing the performance of product and process and evaluating sales and profit margin.

Retail Merchandising Management Process:

·         Analysis:

It is vital to understand the needs or wants of consumers to the retailer. A retailer needs to identify and analyze target audience before pitching the products.

·         Planning:

Planning involves the process of selecting the right product, from the right supplier and sells it at the right price, in right place and at right time and quantity.

·         Acquisition:

Retailers need to take a lead to purchase the selected products in the estimated budget by appropriate suppliers. Retailers can purchase the goods from one or more than one suppliers.

·         Pricing:

In this step, retailers need to make a decision on the pricing structure of the products which are going to sell. It’s important making sure about the profit margin considered while making a price structure.

·         Handling and Control:

Maintaining a stock of goods is very important and costly process for every retailer. This is a process of spending money on maintaining a stock of goods at right time and in a right condition.

As we can see in this post, merchandising is a routine activity of every retailer. In retail, no one can avoid the merchandising.