COURSE OVERVIEW:

Retailers offer a number of benefits to their customers, including making merchandise available to customers when they want it, at a convenient location, and in the quantities they want. In addition, retailers provide services such as the opportunity for customers to see and try out merchandise before buying it. In exchange for these benefits, customers pay money for the merchandise and services provided by retailers.

The importance of pricing decisions is growing because today’s customers have more alternatives to choose from and are better informed about the alternatives available in the marketplace. Thus, they are in a better position to seek a good value when they buy merchandise and services. Value is the ratio of what customers receive (the perceived benefit of the products and services offered by the retailer) to what they have to pay for it.

Thus, retailers can increase value and stimulate more sales (exchanges) by either increasing the perceived benefits offered or reducing the price. To some customers, a good value means simply paying the lowest price because other benefits offered by retailers are not important to them. Others are willing to pay extra for additional benefits as long as they believe they’re getting their money’s worth in terms of product quality or service.

If retailers set prices higher than the benefits they provide, sales and profits will decrease. In contrast, if retailers set prices too low, their sales might increase but profits might decrease because of the lower profit margin. In addition to offering an attractive value to customers, retailers need to consider the value proposition offered by their competitors and legal restrictions related to pricing. Thus, setting the right price can be challenging.

The first part of this course examines two very different pricing strategies used by retailers. The factors retailers consider in setting retail prices are then reviewed. Then the actual process that retailers use to determine prices is described.

The second part examines the reasons retailers reduce their prices when taking markdowns. The pricing techniques retailers use for increasing sales and profits are then examined. The course concludes with a discussion of the legal and ethical issues retailers should consider when making pricing decisions.

LEARNING OUTCOMES:

By the end of this course, you will be able to understand:

• The importance of pricing decisions
• The high/low pricing strategy
• The everyday low pricing strategy
• The advantages of the high/low pricing strategy
• The advantages of the EDLP approach
• The considerations in setting retail prices?
• How to measure customer price sensitivity?
• The impact of intense price competition
• How to collect and use competitive price data?
• How to price services?
• How to match supply and demand?
• How to determine service quality?
• How to set prices based on costs?
• Retail price and markup
• The difference between initial markup and maintained markup
• The relationship between the initial and maintained markup percentages
• The pricing optimisation software
• The profit impact of setting a retail price
• The use of break-even analysis to set prices
• How to calculate break-even for a new product ?
• How to calculate break-even sales?
• Why retailers take markdowns?
• How to optimise markdown decisions?
• How to reduce the amount of markdowns?
• How to liquidate markdown merchandise?
• The techniques for increasing sales and profits
• The individualised variable pricing technique
• The self-selected variable pricing technique
• The leader pricing technique
• The price lining technique
• The odd pricing technique
• The guidelines for making price-ending decisions
• How to use the internet to make pricing decisions?
• The illegal and unethical pricing strategies
• The predatory pricing strategy
• The resale price maintenance strategy
• The horizontal price fixing strategy
• The bait-and-switch tactics
• The scanned versus posted prices strategy
• The deceptive reference prices strategy

COURSE DURATION:

The typical duration of this course is approximately 2-3 hours to complete. Your enrolment is Valid for 12 Months. Start anytime and study at your own pace.

COURSE REQUIREMENTS:

You must have access to a computer or any mobile device with Adobe Acrobat Reader (free PDF Viewer) installed, to complete this course.

COURSE DELIVERY:

Purchase and download course content.

ASSESSMENT:

A simple 10-question true or false quiz with Unlimited Submission Attempts.

CERTIFICATION:

Upon course completion, you will receive a customised digital “Certificate of Completion”.