Class 10: Pricing

Question 1

Who is Amancio Ortega?

Answer 1

Developer of the fast fashion

Question 2

1960 the economical climate in spain

Answer 2

dictatorship of Franco, clothing policies, almost no women working, people having no money to spend

Question 3

Spanish miracle

Answer 3

after death of dictator, 1975

Question 4

Ortega’s innivative approach

Answer 4

usually stores were producing clothes for a season, discounting at the end
Zara was making unique designs in smaller quantities, thus people were buying until it disappeared, people knew it was unique, no need for discounts

Question 5

Inditex: what, how many stores

Answer 5

Zara, massimo, oysho, pull&bear, bershka, stradivarius
7000 stores

Question 6

how to set a price as a business?

Answer 6

1. select objective
2. estimate sales
3. how cost changes in different quality levels
4. check competitor price

Question 7

pricing strategies

Answer 7

1. Skimming - high price to low; when have a huge competitive advantage (xbox, new iphone)
2. Penetration - low to high (what is the minimum price I can make profit with?)
3. Competitive - setting prices following the market
4. Premium

Question 8

Rotation

Answer 8

Quantity of units sold in store during the defined period

Question 9

reasons for sales

Answer 9

1. excess
2. declining market share
3. desire to dominate through lower costs
4. economic recession

Question 10

Price adaptation strategies

Answer 10

1. Geographical
2. Discounts
3. Promotional (3=2)
4. Discriminatory (60+)