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Pricing Analysis
"Price is the one element that produces revenue. Price is also one of the most flexible elements: It can be changed quickly, unlike product features and channel commitments. Although price competition is a major problem facing companies, many do not handle pricing well. The most common mistakes are these: Pricing is too cost-oriented; price is not revised often enough to capitalize on market changes; price is set independent of the rest of the marketing mix rather than as an intrinsic element of market-positioning strategy; and price is not varied enough for different product items, market segments, and purchase occasions." (Kotler, 2002, p.231).
This paper will focus on the pricing of books through three different avenues, online stores, retail chains, and discount stores.
Retail Pricing
Pricing is one of the most crucial areas of decision making for retailers. Pricing decisions are tied to the following philosophy (Bermans & Evans, 2003, p.1).
? With a high-end pricing philosophy, a retailer believes prices can be set at above-market levels due to a posh atmosphere, distinctive products, super customer service, etc.
? With a low-end pricing philosophy, a retailer stresses below-market prices due to low operating costs, special buys, tight controls, etc.
? With a medium pricing philosophy, a retailer treats prices as a non-factor in the competitive strategy; this means at-market prices and more attention to store hours, location, product assortment, etc.
Regardless of approach, the key is that it is consistent with the other parts of a retail strategy. People won't pay high price ...