The pricing strategy that involves frequent discounts and promotions.
High/Low Pricing.
The term for how much customer demand changes in response to price fluctuations.
Price Sensitivity.
The term for the formula that calculates retail price as the cost of merchandise plus markup.
Retail Price.
The term for offering two or more products together at a single price.
Price Bundling.
The term for displaying fake original prices to make discounts appear larger.
Reference Pricing.
What is Everyday Low Pricing?
The pricing strategy that maintains a consistent retail price between regular non-sale and deep-discount sale prices.
What is Competition?
The factor that requires retailers to analyze competitors’ pricing strategies to remain competitive
What is Keystoning?
The practice of doubling the cost of an item to determine its selling price
What is Leader Pricing?
The strategy of setting lower-than-normal prices on specific items to attract customers.
What is Horizontal Price Fixing?
The illegal practice where companies secretly agree to set high prices together.
What is the difference between High/Low Pricing and Everyday Low Pricing in terms of customer behavior and profit strategy?
High/Low Pricing creates excitement and boosts short-term sales but makes customers expect discounts, while Everyday Low Pricing builds long-term trust with stable pricing but may not maximize short-term profit.
What are the Analytical Factors that data-driven pricing decisions rely on?
Demand forecasting, cost analysis, and customer insights.
What is the difference between Initial Markup and Maintained Markup in retail pricing?
Initial Markup is the difference between the retail price and cost before sales or discounts, while Maintained Markup is the actual markup after reductions like discounts and markdowns.
Define and give an example of Price lining.
Where retailers offer a limited number of predetermined price points within a specific merchandise category. + example
How does Predatory Pricing differ from Bait and Switch in terms of unethical pricing strategies?
Predatory Pricing involves setting extremely low prices to eliminate competition and later raising them, while Bait and Switch advertises a low price to attract customers but pressures them into buying a more expensive alternative.