Pricing in the information Pricing in the information ageage

By: Nathaniel C. TuengeBy: Nathaniel C. Tuenge

Twins? Check the resemblance!!

Chapter 10- BackgroundChapter 10- Background

Profit MaximizationProfit Maximization - is a pricing that tries to - is a pricing that tries to obtain as much profit as possible.obtain as much profit as possible.

At Market Levels (Price Zone)At Market Levels (Price Zone) - is a range of - is a range of prices for a particular merchandise line that prices for a particular merchandise line that appeals to customers in a certain market appeals to customers in a certain market segment.segment.

Flexible PricingFlexible Pricing - is a policy that encourages - is a policy that encourages offering the same products and quantities to offering the same products and quantities to different customers at different prices.different customers at different prices.

Multiple unit pricingMultiple unit pricing - occurs when the price of - occurs when the price of each unit in a multiple-unit package is less than each unit in a multiple-unit package is less than the price of each unit if it were sold individually.the price of each unit if it were sold individually.

Chapter 10- Background Chapter 10- Background Cont.Cont.

Bundle pricingBundle pricing - occurs when distinct multiple - occurs when distinct multiple items, generally from different merchandise items, generally from different merchandise lines, are offered at a special price.lines, are offered at a special price.

Leader pricingLeader pricing - is when a high-demand item - is when a high-demand item is priced low and is heavily advertised in order is priced low and is heavily advertised in order to attract customers into the store.to attract customers into the store.

High-Low PricingHigh-Low Pricing - involves the use of - involves the use of everyday prices and low leader “specials” on everyday prices and low leader “specials” on items typically featured in weekly ads.items typically featured in weekly ads.

Mark DownMark Down - is any reduction in the price of an - is any reduction in the price of an item from its initially established price.item from its initially established price.

ESL / EPLESL / EPL

What is it?What is it?

EElectronic lectronic SShelf helf LLabeling abeling or or EElectronic lectronic PPrice rice LLabeling abeling

Article Relevance?Article Relevance?

The worlds 2The worlds 2ndnd largest retailer Carrefour largest retailer Carrefour France, just signed a 2 year contract with France, just signed a 2 year contract with Pricer AB for an ESL system. (May 2005)Pricer AB for an ESL system. (May 2005)

Michigan may pass law making price Michigan may pass law making price tags on merchandise optional ? I.E.- ESL tags on merchandise optional ? I.E.- ESL would be possible in Michiganwould be possible in Michigan

ESL / EPLESL / EPL

How it works?How it works?

Retailer changes price on computer in back.

Simultaneous & Instantaneous price change between store shelves & cash register.DEMO-PRICER

SYSTEM

Key benefitsKey benefits

Pros:Pros:Customer loyaltyCustomer loyalty

Flexible Pricing & PromotionsFlexible Pricing & Promotions

Reduced pricing errorsReduced pricing errors

Operations SavingsOperations Savings

Stock managementStock management

Who’s up in arms?Who’s up in arms?

AARP, Consumer advocates, Labor AARP, Consumer advocates, Labor UnionsUnions

Cons: Cons: Implementation CostImplementation Cost

Who gets the benefit?Who gets the benefit?

Overcharging of customers?Overcharging of customers?

Legality- item pricing laws?Legality- item pricing laws?

BibliographyBibliography

Hastings, Rusty. Hastings, Rusty. “Eliminate a banana peel.” “Eliminate a banana peel.” Chain store Chain store ageage Jun. 2002: vol. 78 Issue 6, p84, Jun. 2002: vol. 78 Issue 6, p84, EBSCOhostEBSCOhost. OSU Library. . OSU Library. Corvallis, OR. 14Corvallis, OR. 14thth May 2005 May 2005 <http://osulibrary.oregonstate.edu/research.php/db.php?<http://osulibrary.oregonstate.edu/research.php/db.php?arg=a>arg=a>

Kaminski, Frank. “Legislators Consider changes in state’s Kaminski, Frank. “Legislators Consider changes in state’s item pricing laws”. Grand Rapids Business Journal. Feb. 3item pricing laws”. Grand Rapids Business Journal. Feb. 3rdrd 2003: pg 14-15.2003: pg 14-15.

Pricer. May 09, 2005. <Pricer. May 09, 2005. <www.pricer.sewww.pricer.se>> accessed 14 accessed 14thth, May , May 2005.2005.

Carrefour France. Carrefour France. http://www.carrefour.com/english/homepage/index.jsphttp://www.carrefour.com/english/homepage/index.jsp accessed 15th, May 2005accessed 15th, May 2005