# data[].attributes.body
Question 3. Some of the factors that affect the retail pricing strategy is the company or store image that they are trying to portray to customers, for example a company that wants to portray themselves as a more luxury brand will more than likely have higher quality items which then have a higher price. Another factor is the type of merchanidse being sold so this can relate to the quality of the good, its durability as well as the exclusivity of the good. Another factor is the competition factor which can determine the price of any similar products that are being sold at competition companies. Manufacturers policies also affect pricing strategies due to what they suggest the good should be sold at, the selling costs including the stores operating costs as well as staff costs can be another factor on the price of goods being sold. Another factor is the demand of supply, this can affect the price of a good based on the amount of demand and consumer interest in a particular good as to what price it will be sold at and finally the handling cost can affect price based on the cost of delivery of the good as well as assembly.

Question 4. Price elasticity of demand is the sensitivity of customers to price changes relating to the amount of the good that they will purchase. It is important for retailers to understand this concept as it will give them an understanding of how much they can adjust the price of their goods and to be able to assume the effects of these changes in relation to increase or decrease in demand from consumers. Whether goods are elastic or inelastic also needs to be understood as items that are elastic will affect level of demand through price changes but more inelastic products will probably have demand be less affected by price change.

# data[].attributes.body
Q.5
A markdown from an item's original price is used to meet the lower price of another retailer, adapt inventory overstocking, clear out shopworn merchandise, reduce assortments of odds and ends, and increase customer traffic.

Q.6
Gross profit = $14.95 - $6.50 = $8.45
Gross profit margin = (revenue - Cost of goods sold) / revenue
= (14.95 - 6.50) / 14.95 = 0.56521 = 56.52%

# data[].attributes.body
1. The types of merchandise
2. The competition
3. The different costs
4. Supply and demand
5. Manufacturers
6. The company/brand that is trying to be portrayed

Question 4
What is the price elasticity of demand?
This refers to how sensitive demand is to the changes in price. It could either be elastic or inelastic. This is important for retailers to know to maximise their profits and try to have the best possible pricing strategy

# data[].attributes.body
Question 3
Factors That affect Retail Price Strategy are-
1.) Type of merchandise- This refers to the type of good the firm sells, the pricing strategies vary from the Quality, Exclusivity, and perishability.
2.) Competition- This refers to The prices of direct and indirect competitors of the firm
3.) Selling Costs- These include Sales commissions, Store costs etc.
4.) Demand and Supply- These refer to the consumer interest and availability of a good.
5.) Handling Cost- These include the costs of warehousing, assembling and delivery
6.) Company/Store Brand image
7.) Target Customers

Question 4
Price elasticity of demand refers to the responsiveness of the demand for a product to a change in price.
Goods can either be elastic or inelastic in price. An elastic good will have a large change in demand when the price changes and an inelastic good will have a little change in demand when the price changes.
It is important for retailers to understand this concept as it can allow them to maximize revenue by changing price of certain goods (based on elasticity) For example, inelastic goods can be priced high where as elastic good can be priced lower.

# data[].attributes.body
Retail pricing Strategies

1. Prestige or Above- market Pricing

•   Elite, innovative, high quality, exclusive product

•   prestigious store image

•   specialised service model

2. Competition-oriented or market pricing

•   Comparable goods priced exactly the same or similar to competitors

3. Volume pricing

•   Quality and competitive prices = value leads to volume

4. Everyday low pricing

•   aim high sales volume and margin

•   Prices sit between lowest discount price and regular non sale competitors

•   ‘stable pricing’ as prices do not vary
Pros = Well known to frequent customers resulting in people revisiting the retailer. Cons = May not have a high profit from the lower prices therefor would be hard to bump up prices and make more profit in future.

5. High/Low Pricing

•   Prices pitched at market price and discounted for short periods of time

6. Cost Plus or Margin Pricing

•   Retail prices determined by simply adding a fixed profit margin to each item

# data[].attributes.body
Prestige :

• Elite, innovative, high quality, exclusive product

• Prestigious store image

• Specialised service model

Competition Oriented or

Market Pricing:

• Comparable goods priced exactly the same or similar to competitors

Volume Pricing:
Quality and competitive prices create value that leads to volume

Everyday Low Pricing:
• Aim high sales volume & margin

• Prices sit between lowest discount price and regular non sale competitors

• ‘Stable pricing’ as prices do not vary

High/Low Pricing
• Prices pitched at market price and discounted for short periods of time

Cost Plus or Margin Pricing

• Retail prices determined by simply adding a fixed profit margin to each item.

2. Prestige:
Pros: high per-unit profit margins

Cons: Smaller target market, higher expenses,low customer loyalty.

# data[].attributes.body
The sensitivity of customers to price changes in terms of the quantities they will buy
Elastic – small percentage changes in price lead to substantial percentage changes in the number of units bought
Inelastic – large percentage changes in price lead to small percentage changes in the number of units bought
Important because there is often a relationship between price and consumer purchases and perceptions

# data[].attributes.body
Q3 )Factors influence retail price strategy
1) Company/store/brand
2) Target customer profile
3) service model
4) competition- price of identical products at competitors
5)Type of merchandise- quality, exclusivity
6) Selling cost- selling staffs, sales comission
7) Manufacturer policies- price set by manufacturer
8) Demand and Supply- availability of goods and customer of interest
9) Handling costs
10) Vulnerability to Shrinkage

Q4) Price elasticity of demand
Elastic-small change in price lead to substantial change in units of items bought
Inelastic- Large change in price lead to small change in units of items bought eg: petrol

There is a relationship between goods and customer interest. For elastic of demand, when price increase, consumers will have less interest in buying such brand and will likely switch to other brand which lead to less profits to the retailers. Retailers need to know the demand of product and set the price properly so that the price will not less than profit margin which will earn less money and too high price will makes customers change to other brands. However, inelastic items will be less likely to be affected by price changes

# data[].attributes.body
A markdown is any price adjustment or change downwards to the original selling price. The main purpose is to attract customer attention to buy, although it reduces profits. Markdowns are often used to match prices of another retailer, clear inventory and increase customer traffic to a store. Markdowns are often used after specific seasons have passed (e.g. winter coats are cheaper in spring in order to clear out stock).
The major types of markdowns include:
- promotional
- seasonal/obsolete
- shrinkage
- discount.
When there is less consumer interest in a product larger markdowns are required to generate interest.

Q 6.
Gross profit margin in dollars = $14.95 - $6.50
= $8.45
Gross profit margin %
= $8.45/14.95
=56.52%

# data[].attributes.body
Question 1:
Prestige pricing-- what assumes that consumers will not buy goods and services at priced deemed too low.
Competition pricing-- a retailer can use competitors' prices as a guide.
Volume pricing-- value leads to volume.
Everyday low pricing-- prices sit between the low discount price and regular non sale competitors.
High/low pricing: prices pitched at market price and discounted for short periods.

Question 2:
Competition pricing:
PROS: 1)Better control of price. The price is assumed to be fair to both consumers and the retailers.
CONS: 1)Above-market price is not suitable for a retailer that has an inconvenient location and is not innovative.
2)Though competition in the market may lead to the price war which will result in lows profits and losses.

# data[].attributes.body
-Company/Store/Brand Image
-Target customers
-Service Model
-Type of merchandise ( quality, perish-ability, exclusivity, markdown risk)
-Competition (price of competitors items)
- Manufacturers policies (Recommendations or pricing suggestions from manufacturer)
- Selling costs ( selling staff, sales commissions, store costs )
- Demand and Supply ( availability of goods and the level of consumer interest)
- Handling costs (warehousing, assembling, delivery)
- Vulnerability to shrink

# data[].attributes.body
Question 1) There are three main pricing strategies, detailed below:
Prestige/Above market Pricing: This involves setting the price above the general agreed market price, either to create the image of sophistication and elitism of the product, or otherwise, to increase the profit on mark-up of the base cost of the product. It can, however, also boost the image of the store itself, if it only stocks high-cost, and seemingly high range goods.

Competition-Oriented/Market Price: This strategy revolves around pricing your goods in the same range as your direct competitors.

Volume Pricing: Volume pricing moves in the opposite direction of prestige pricing, in that instead of aiming to improve the appeal of your product through image, you aim instead to reduce price, to give you a competitive edge. If you are selling a high quality product, at a lower price, you may lose some prestige, and profit from the product, but you will make up for it in sales.

Question 2) Looking at the middle-range strategy of Competition-Oriented pricing, we can immediately see an advantage. It is the safest of the three options in relation to pricing, as it does not attempt to exceed or undercut the prices of the direct competitors. It also means you will be making a decent amount of profit, as you have not cut your prices to make a competitive edge. Further, it means you will also need to focus on other aspects of your brand, and not just price. However, it also means that if you do not have this unique selling point, you do not have any significant advantage over your competitors.

# data[].attributes.body
A markdown is any  downward price adjustment from the original retail price designated to a product. they are an important tool to use for retailers in different circumstances but the primary reasoning behind it would be to attract customers attention to buy the product rather than to maximize profit. markdowns are common in clearance sales where the retailer is attempting to clear out inventory (due to factors such as seasonality, shrinkage or discount) or from a competitive standpoint where the retailer is aiming to match rivals pricing on a particular product.

Q6)
gross profit margin = 14.95 - 6.50 = $8.45
gross profit margin percentage = 8.45/ 14.95
= 56.52 %

# data[].attributes.headline
1.	Describe all the Pricing Strategies2.	Choose one and outline the pros and cons.3.	What are the factors that influence retail price strategy?4.	What is the price elasticity of demand? Why is it important for retailers to understand this concept?5.	Explain why Markdowns are a necessary part of a Retail Business 6.	Calculate Gross Profit $ and % if the Cost is $6.50 and the Sell is $14.95

# data[].attributes.subject
1.	Describe all the Pricing Strategies2.	Choose one and outline the pros and cons.3.	What are the factors that influence retail price strategy?4.	What is the price elasticity of demand? Why is it important for retailers to understand this concept?5.	Explain why Markdowns are a necessary part of a Retail Business 6.	Calculate Gross Profit $ and % if the Cost is $6.50 and the Sell is $14.95