A major consideration in business from both the manufacture’s and customer viewpoints is and has always been the price.
The issue discussed here is” should the retailer practice “everyday fair pricing” or engage in “frequent price promotions”? Is it better for a brand to raise its regular price and offer price promotions or is the brand better off offering lower regular price with limited price promotions?
In my paper I will support and argue for setting the right price, which in other words make shoppers feel they are getting a fair shake from the businesses they regularly patronize.
Importance of setting the Right Fair Price
Pricing strategies are important criteria which affects the overall success of the company. The price set is simply not a financial issue but a marketing issue that determines how the product is positioned and how the market (customers) perceives the product.
Pricing is a challenge with different implications at any stage of the business cycle, whether you are setting the prices for the first time, raising or lowering existing prices, or determining how to react to an unsteady economic climate. Overprice and you will risk losing your business to your competitors. Under price and you may inadvertently devalue your offerings.
Tom McNeil, President of Executive Career Resource Group, Wellesley, MA describes the implication of price:
1. “Your price is too high, and you knock yourself out of the game.
2. Your price is much less than the client was prepared to pay, and you lose money.
3. Your price is much less than that of your competitors, and you are perceived as offering less value.
4. The client accepts your price but then decides that your services aren't worth it, because you haven't convinced him or her of your value.”
Fair Pricing is to be viewed from two perspectives:
“From a consumer perspective, this means a discounter's prices have to be low enough to make it worthwhile for a person to give up some customer services and brand choices; at an upscale store, the level of services and brand choices must be worth the premium prices.
From a retailer perspective, "fair" means prices reflect a firm's operating structure in a way that enables it to earn a satisfactory profit. “
Wal-Mart’s fair pricing approach has enabled it to maintain a discounter image, and attract a steady stream of price-conscious shoppers, reduce advertising expenditures, with less frequent sales.
The “everyday fair pricing." approach has the perception of regular prices in a way that appeals to the chosen customer market. This fairly reflects the merchandise, customer service, ambience, etc. which is part of the enormous success story of Wal-Mart.
In the “big picture” of pricing and from the customer's point, prices must be perceived as fair - every day.
Fair prices doesn’t necessarily equate with low prices. There are certain customers who are willing and even eager to pay top dollar for what they want. They are...