CHAPTER 9: RETAIL PRICING

Question 1

*What are the external factors that impact pricing decisions?

Answer 1

• The price sensitivity of the customers.
• The legal constraints (ceiling price on certain commodities for basic consumption).
• Location.
• Customer service.
• The competition.
• Store image.

Question 2

*What are the pricing objectives?

Answer 2

• Profit oriented.
• Sales oriented.
• Status quo.

Question 3

*What are the pricing policies?

Answer 3

• Pricing above the market.
• Pricing at the market.
• Pricing below the market.

Question 4

*What are the types of pricing strategies?

Answer 4

• Variable pricing.
• Flexible pricing.
• Leader pricing.
• Odd pricing.
• One price pricing.

Question 5

Define markups

Answer 5

When doing business, retailers set prices by adding a markup to the cost of the merchandise. The markup can be in the form of percentage, either the selling price, or the cost of goods, or in ringgit.

Question 6

Define markdowns.

Answer 6

Markdowns mean reduction in original retail prices and it can be temporary or permanent.

Question 7

What are the reasons for markdowns?

Answer 7

• Buying error.
• Pricing error.
• Merchandising error.
• Promotional error.