About This Chapter
Retail Pricing Strategies - Chapter Summary
Check out this comprehensive chapter to examine various retail pricing strategies. Inside, you'll find a handful of short video and text-based lessons that discuss retail math, pricing decisions and the factors that influence retail pricing. Each lesson comes with a short quiz to help you reinforce your understanding of the material. You can study this chapter any time that fits your schedule, and we've made these resources accessible on any computer or mobile device. By the end of the chapter, you should be equipped to:
- Define the components of retail math
- Compare types of inventory cost methods and pricing decisions
- Describe the relationship between pricing strategy and consumer perception
- Differentiate between mark-up and break-even pricing
- Explain how businesses choose the right price for products
- Discuss the adjustment of prices based on environmental factors
- Identify economic factors that affect pricing and pricing strategy
1. What is Retail Math? - Definition & Examples
Applying basic math skills is critical in evaluating retail performance. In this lesson, we will look at a few examples of retail math formulas and show how they are applied in real world situations.
2. Inventory Cost: Definition, Methods & Types
Have you ever thought about how much it costs a business to keep inventory in stock? It's not just the price the business pays for the items that it keeps in stock. It is so much more. In this lesson, we will discuss exactly what constitutes actual inventory cost.
3. Pricing Decisions: Profit-Oriented, Sales & Status Quo
Companies need to determine the main objective of their pricing strategy. The different objectives can be based on profit, sales, competition or customers. The end result should be customer satisfaction.
4. Pricing Strategy and Consumer Perception
Consumers' perceptions of products rely heavily on the pricing strategy that is chosen by the marketing manager. Price will impact not only consumer perception but also profit and speed of product adoption.
5. Pricing Cost: What Motivates Mark-up and Break-Even Pricing
The marketing mix consists of the four Ps (product, place, promotion and price). The marketing manager has to decide what type of pricing strategy to use for the overall marketing plan. The options depend on how cost is determined.
6. Price Selection: How Businesses Select the Correct Price for Products
Marketing managers need to select the correct price for their product as part of the marketing mix. The three pricing strategies are price skimming, penetration pricing and status quo.
7. How Prices Can Be Adjusted in Response to Environmental Factors
Marketers have the ability to fine-tune the base price of products in the marketing mix. They can use discounts, rebates, and allowances to temporarily change the price to increase sales and profits.
8. Economic Factors of Pricing and Pricing Strategy
Economic factors can alter companies' pricing strategies. Prices need to be flexible, especially in response to inflation and recessions. There are numerous strategies that can be employed to combat economic changes and lead to corporate sales and profits.
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