...The Pricing and Retail Strategy of General Motors One of the main goals of General Motors (GM) is to establish sustainability in the market place by creating long-term value. This approach is executed at every level of the company. Sustainability is a value proposition that takes into consideration environmental, social, and economic opportunities and supports the long-term success of the company. Value is created through top-line growth opportunities, bottom-line improvements, and risk mitigation. At this point, the response of the customers will determine the amount of value created. Strategy The sustainability strategy of GM aims to create long-term stakeholder value; align corporate policies, positions, and sustainability initiatives; focus efforts on areas of significant impact; and to be executed within every function by every employee. The strategic pillars are focused on four specific areas: 1) Innovation that grow business through new products and services that customers desire while addressing environmental issues and social concerns. 2) Integration that ensures sustainability is embraced throughout GM. 3) Transparency that builds trust and accountability. 4) Employee engagement that encourages a sustainable mindset at GM. Tollin and Jesper cited that in the area of sustainability as a marketing implement, Lozano and Huisingh (2011) reported that “In the sustainability literature it is pointed out that the evolving view on sustainability...
Words: 701 - Pages: 3
...Game Theory Application on Pricing Strategies Used by the Retail Supermarket Industry Everyday low pricing (EDLP) and High-Low Pricing are the most popular pricing strategies used by companies in the retail supermarket industry. In this part of the project, the two pricing strategies are analyzed using a game-theoretic framework and compared to the observed behavior of supermarket within the industry. First, the definitions of both strategies are provided to better understand the analysis. Everyday low pricing (EDLP) is a pricing strategy that provides consumers with low prices without the need of using of coupons or waiting for sales price events. This strategy was started by Wal-Mart and Procter & Gamble and it is believed that EDLP saves retailers the time and expense of applying short-term promotional pricing, as well as, the cost of distributing and processing of coupons. Companies who often adopted this strategy also believed that it creates shopper loyalty. (Barron's Educational Series, Inc., 2000) The basic premises that suppliers are basing on when using EDLP are the following: * Steady, competitive prices will lead to even demand for products. * Inventory and other logistical costs will drop due to effective management of product flows. * There will be reduction of promotional costs and other forms of trade. * The costs of saving due to consistent demand and better management of inventory will result to lower final price of the products. (Hurwich...
Words: 1272 - Pages: 6
...What Affects Pricing? Consumer Factors Mfrs., Wholesalers, Suppliers Competition Strategy Variables Govt. Factors – FTC • Target audience • Profits Retail Pricing Strategies • Supply/Demand • Price Elasticity of Demand Sensitivity of buyers to price changes Pricing Strategies Demand-oriented Cost-oriented Competition-oriented Demand-Oriented Estimate how much customers will buy at various price levels • Set prices to achieve sales goals Determine prices acceptable to target market • Demand ceiling • Demand floor Psychological Pricing • Price/quality relationship • Odd pricing Zone Pricing: “Refining companies actually map out areas and charge dealers different wholesale prices based on secret formulas that often factor in location, the area’s affluence or simply what the market will bear.” Cost-Oriented Takes into account the cost of merchandise, retail operating expenses, and desired profits Markup covers operating expenses and profits $1.20 1.35 Wholesale Prices: Ct.: Berlin Greenwich NY: Albany NYC $0.95 1.01 $0.98 1.12 Palo Alto Northern CA: Pleasanton • Markup = Selling price (retail price) – Cost of Goods Entrée Economics Pinot Bistro, Los Angeles 300% solution: Many independently owned restaurants aim for an overall food markup of 300% or 4X the cost of the raw ingredients But, you might see a 500% markup on a grilled vegetable plate (and pay $9) and only a 200% markup on a tenderloin meal (and pay $25) Grilled Pork...
Words: 956 - Pages: 4
...* Chapter 9: Problems 3, 4, and 5 * Chapter 10: Problems 2, 6, and 10 Use the Internet or the Strayer Library to research the economic costs involved in conducting a break-even analysis for a good or service of your choice. Be prepared to discuss. Break-even exists when a business makes neither a profit nor a loss. This occurs at the level of output where total costs equal total revenue, i.e. TC = TR. Some firms have to consider Actual cost, opportunity cost, explicit cost, implicit cost, Use the Internet or the Strayer Library to research a company that is competing in a purely (or perfectly) competitive market. Be prepared to discuss. * Perfectly Competitive Markets: "Market with many buyers and sellers, so that no single buyer OR seller has a significant impact on price...most agricultural markets are close to being perfectly competitive." When you have a product with no distinguishing characteristics, such as corn, then the market ends up setting the price by how much supply is on the market compared to the demand. That means sellers on commodity markets are "price takers." One corn farmer cannot say, that while his corn husk is more expensive, it comes with a sunroof or granite counter tops. Holding the quality of corn constant, there is no difference between corn from one farmer or another. And when it comes to price, if one corn farmer prices his crop below another, he will just sell it all at a lower price than his competitors. Because there...
Words: 1621 - Pages: 7
...Wal-Mart & Target – 2014 Holiday Season Strategy Retail stores Target and Wal-Mart have tacked holiday season in a different way this year compared to before. In previous years, there has been a trend to bring Black Friday’s discounts earlier in November, however, this year Wal-Mart and Target went beyond all market expectations. Wal-Mart’s strategy for the holiday season is “to offer the best brands, to make shopping experience easier, and to continue providing low prices than competitors to bring joy to their customers”, says Duncan Mac Naughton, Wal-Mart Us Chief Merchandising Officer. For 2014 Holiday season these retail stores have begun the season sales on November 1st, providing Black Friday and Cyber Monday discounts from the first week of November all the way till the week before Christmas, stretching the holiday season almost an additional month compared to previous years. Brian Cornell, Target’s Chairman of the Board and CEO, says “Target’s promise is ‘Expect More. Pay Less’, and when we do that, Target is impossible to beat”. Retail stores depend largely on their pricing in order to be competitive and successful in their industry. In order to be able to achieve success, these stores need to implement a pricing strategy that goes in accordance to their mission. In the case of Target and Wal-Mart, their pricing strategy is based on a maximum market share pricing objective. When looking and this retail stores, they possess a huge part of the market and they achieve...
Words: 1162 - Pages: 5
...Study on pricing strategies for FMCG products in organized retail stores Introdction: Pricing of a product and services means price differentiation is one of the most vital element of the Marketing mix, as it is the key factor or organizations for generation turnover for them. Past records say prices were determined by forces of demand and supply i.e. consumers and producers and that is the leading aspect of most of the economies in many countries. Now alike many other things, development, growth and education of consumers has reshaped the pricing panorama. Thus the pricing the FMCG product has become more multifaceted with rise of retail stores. Like traditional pricing the pricing for FMCG in organized retail stores is also difficult and must reflect the supply and demand connection. While developing pricing strategies for FMCG products in organized retail stores, it is more important to realize that it is an unspoken relationship between price and value for FMCG products. General tendency of consumers that they wish to pay more for Luxury products than economy products. Traditionally, pricing was about finding costs, how many consumers is willingness to buy your products at set price, taking in to consideration the competition, pricing, and then setting price. The organized retail stores has made pricing very competitive for FMCG products. In organized retail stores pricing for FMCG is more important and different from historical pricing coz availability of other...
Words: 592 - Pages: 3
...Boiling Frogs: Pricing Strategies for a Manufacturer Adding a Direct Channel that Competes with the Traditional Channel Kyle Cattani1 Wendell Gilland1 Hans Sebastian Heese2 Jayashankar Swaminathan1 1The Kenan-Flagler Business School, The University of North Carolina at Chapel Hill 2Kelley School of Business, Indiana University January, 2005 1 Boiling Frogs: Pricing Strategies for a Manufacturer Adding a Direct Channel that Competes with the Traditional Channel Abstract In this paper, we analyze a scenario where a manufacturer with a traditional channel partner (i.e., a retailer) opens up a direct Internet channel that is in competition with the traditional channel partner. We first consider that in order to mitigate channel conflict the manufacturer, who chooses wholesale prices as a Stackelberg leader, commits to setting a direct channel retail price that matches the retailer’s price in the traditional channel. Under this general equal-pricing strategy, we determine the effect of more specific pricing strategies on prices and profits of the manufacturer and the retailer. These specific strategies are: (1) keep wholesale prices as they were before, (2) keep retail prices as they were before, or (3) select wholesale and retail prices that optimize profits for the manufacturer. Within these strategies we identify and summarize cases when the resulting prices are lower than the pre-Internet prices, and when they are higher, relating them to the respective...
Words: 13647 - Pages: 55
...Strategies of Big Bazaar Pricing strategies Big bazaar follows different pricing strategies to cater to different consumer segments. Value pricing, differentiated pricing, Instore experience Ambience Price Provide assistance Location Loyalty Customer’s profile: Organized retail is growing at a fast pace owing to increasing urbanization, changing lifestyles and higher disposable income levels of people. Due to lack of time spent for shopping, consumers in Tier-I and Tier-II cities prefer these retail chain stores as it reduces many perceived risks like functional and social risks. When consumers still prefer Kirana stores for instant purchases that would gratify their psychological and time risks, organized retail is slowly gaining momentum as this enables consumers to stock items for a prolonged period of time. The modern retail outlets are also coming up with innovative programs to entice customers, encourage repeat visits and build store loyalty. Brands that we compare Big Bazaar Hypercity Reliance Mart Spencers’ Shoppers’ stop Competitor analysis Brands | Brand Image/identity | Strengths, Strategies | Big Bazaar | ‘Mandi’ feel, orange-blue logo, ‘Is se sasta aur accha kahin nahi’ | Different pricing strategies for different consumer segments like Wednesday bazaar, the great exchange offer etc. | Hypercity | Colourful building logo, ‘Big store, big savings’ | Maintaining a dynamic, fully functional and attractive website, better store layout when compared...
Words: 346 - Pages: 2
...Kohl’s Pricing and Retail Strategy Kohl’s opened their first department store in 1962 Brookfield, Wisconsin a spinoff of the Kohl’s Grocery chain which was founded in Milwaukee, Wisconsin in the late 1920s. Kohl’s has grown to over 730 stores in 41 states. (Reference for Business, 2005) Retail Strategy Kohl’s operates as a discount department store offering name brand products with discounted pricing. Targeting middle income families, Kohl’s retail stores average 86,500 square feet in size and are located in shopping malls as well as freestanding marketplaces. The retailer also has an online presence at Kohls.com. (Reference for Business, 2005) Kohl’s uses a variety of different venues to advertise and promote its products including magazines, newspapers, direct mail, e-commerce, internet, Kohl’s App as well as mobile coupons can be texted to a smartphone. Kohl’s also offers a credit card providing additional in store as well as online savings. Kohl’s offers a “Kohl’s cash” rebate with every purchase in the store. Kohl’s cash is an in store cash incentive for the consumer to return on another date to the store. With every 50.00 spent at the department store the consumer receives a 10.00 that can be redeemed at a future date on additional purchases. (Kohl’s 2014) Pricing Strategy Kohl’s achieves discount pricing with limited staffing, centralized buying and distribution passing on their savings on to the consumer. Shoppers at Kohl’s expect to get a discount,...
Words: 676 - Pages: 3
...an offering has high value they are much more likely to move from satisfied customers and become loyal customers. The customer’s perception of our offering’s price is a key and critical component in the perceived value of our offering. After review of the options for pricing objectives, our UPS Store’s offering of UPS Ground shipping is based on benchmarking the competition and utilizing a competitor-based pricing strategy. The UPS Ground shipping retail rate is set by UPS based on a thorough understanding of their primary competition, FedEx. Our UPS Store prices UPS Ground shipping at the published UPS retail rate. This strategy will allow our UPS Store to leverage the UPS brand to capture the Ground shipping business from our competitors in the Lawton area; a single independent retail shipping outlet that must up-charge to offer the same product. Utilizing a one-price strategy pricing tactic our UPS Store can offer UPS Ground shipping at the UPS retail rates and remain competitive. Our UPS Store offers ground shipping in an approach similar to cost-plus pricing. Our store receives a discount on the retail Ground Shipping rate. This allows our UPS Ground shipping price to exactly match the UPS retail Ground Shipping rate while leaving a margin that represents our markup over cost. Our store is in a position to offer discounts to our customers. This is generally reserved for our B2B customers in the form of a frequent shipper...
Words: 251 - Pages: 2
...be explained. Further, a rationale for determining the profit-maximizing quantity will be provided. Decisions will be made by using the concepts of marginal costs and marginal revenue to maximize profit. A mix of pricing and non-pricing strategies will be suggested. This proposal will also explore options of creating or increasing barriers to entry. Further, increased product differentiation will be discussed. Finally, other way to minimize costs will be explored. Market Structure and Elasticity of Demand CVS retail pharmacies operate in a monopolistic competition market structure. According to Investopedia (2012), the monopolistic competition is, “A type of competition within an industry where: 1. Firms produce similar yet not perfectly substitutable products. 2. Firms can enter the industry if the profits are attractive. 3. Firms are profit maximizers. 4. Firms have some market power, which means none are price takers. Firms in a monopolistic competition sell goods that have either actual or perceived non-price differences. These differences are not so significant, however, that they climate the potential for substitutes. The cross-price elasticity of demand in a monopolistic competition, therefore, is positive or high. Prescription drugs and retail pharmacies are close but imperfect substitutes, which perform the same basic functions but have differences that distinguish them from each other such as location,...
Words: 2058 - Pages: 9
...CONSIDERATION IN SETTING RETAIL PRICES Customer Price Sensitivity and Cost As the Price of a product increases, the sale of the product will decrease, because fewer and fewer customer feels the product is a good value. The price sensitivity of the customer determine how many units will be sold at different price level Price Elasticity- a commonly used measure of price sensitivity or the percentage in quantity sold divided by the percentage change in price: ELASTICITY= Percentage change in quantity sold Percentage change in Price Competition- is the rivalry among sellers trying to achieve such goals as increasing profits, market share, and sales volume by varying the elements of the marketing mix: price, product, distribution, and promotion. Collecting and Using Competitive Price Data Most retailers routinely collect price data about their competitors to see if they need to adjust their price to remain competitive. Competitive price data are typically collected using store personnel, but pricing also are available from business service providers. Reducing Price Competition Retailers attempt to reduce rice competition by utilizing some branding strategies. Legal and Ethical Pricing Issues * Price Discrimination- occurs when a retailer charges different prices for identical products and or/ services sold to different customer. Price Discrimination between retailers and their customer are legal. * Predatory Pricing- arises when a dominant retailer sets...
Words: 1769 - Pages: 8
...promote and position her chocolates to become and remain profitable. The short term issue is becoming profitable quickly and using a robust pricing strategy to influence sales in a positive way. The long term issue is tailoring that strategy to sustain the company’s growth. Cause of Problem: The main issue at hand is to figure out how to turn her award winning chocolate into profits. Product considerations in pricing had to be taken into account as her chocolates have a shelf life and if she gets into a bad distribution sale like before she will run out of shelf life. Marilyn wondered how the price and size of the chocolate bar affected the consumers purchase decision, and how consumers evaluated the quality of each of the competing chocolate bars when making their purchase. Demographic, psychological, and price elasticity factors must be investigated in order to evaluate their pricing to consumers. She also thought that if her product would have been placed with similarly priced goods it would sell Kitchen Market New York. She just was not sure how her product should be priced compared to other products in the store. In order to do this she must also evaluate the environmental decisions on her pricing and product placement decisions. Cowgirl Chocolates was losing money and she needed to come up with a comprehensive business strategy to turn her company around. Decision Criteria and Alternative Solutions: Deciding for the Future – Possible Areas to Change for Improved...
Words: 1317 - Pages: 6
...‘Tukitaki’ retail chain shop”. Tukitaki is a new retail chain store that caters to the middle class and upper middle class community in Dhaka. The store is an upscale international grocery, food, toiletries and cosmetic with a distinct menu. Our focus is to provide beverage, drinks, fruit, vegetables, healthy food, baby products etc. we want to become the central hub of shopping activity for the local middle class population as well other who enjoy buying quality product and healthy food items in a reasonable price. Our purpose of research is to understand the challenges and barriers to open the ‘Tukitaki’ retail shop. In the past decade, retailers have invested billions of dollars on advertising and technology to attract customers and get the right product in the right store at the right time at the right price. Retailers have invested in new technologies such as wired and wireless networks, supply chain systems, planning software, and more to improve efficiency and reduce costs. At the same time, retailers have spent significant time and money developing and implementing marketing and merchandising strategies to drive increased customer foot traffic and build customer loyalty. In 2008, Wal-Mart alone is estimated to have spent about $1.7 billion on advertising, and that was just for its U.S. stores. In the same year, retail supplanted the automotive industry as the number one ad spender in the U.S., based on measured spending. In 2008, the Miscellaneous Retail category of...
Words: 5850 - Pages: 24
...mix. This report discusses the four components that form the composition of the marketing mix, commonly referred to as the four P’s. These four components include, product, price, place, and promotion. They are considered the very building blocks of marketing. Each component is explained and applied to the functions of Australian retail petrol outlets, which will provide a solid understanding of the significance of the marketing mix in the market. THE MARKETING MIX PRODUCT The product is a combination of many different components, all of which attribute to its success within the market. A good, service idea or place a product is anything that can be offered in an exchange, that meets the customers needs or wants. Products can be tangible (physical item that can be touched) or intangible such as a service. Products are usually referred to as having three layers, a core, actual and augmented. In the core are all the products benefits to the consumer. The actual describes the product itself. The augmented are the features or additional benefits that are provided alongside the product, such as free delivery or installation. The retail fuel market is highly competitive and dynamic. The product itself is a naturally occurring liquid found in formations in the Earth. The benefits of petroleum are that it is easy to store and transfer, do not require high-pressure tanks, and are relatively lightweight. It is considered...
Words: 1643 - Pages: 7
