Everydy Low pricing - Assignment Example

Everyday Low Pricing Everyday Low Pricing As a consumer, would you prefer that your local supermarket offer everyday low prices, offer some products at major discounts (half off) periodically, or offer some combination of the two? As consumers, the preference is to be offered everyday low prices but also with intermittent products being offered with major discounts. The everyday low price strategy would be perceived as expected and normal and would not lure other new customers to buy since it would already be understood as given and a fact to the supermarket.

By offering major price discounts, customers would be enticed to focus on these products which are on sale.2. What could your local supermarket do other than offer low prices or price discounts to win your business (delight you) and still maintain a high profit margin? As suggested, other than offering everyday low prices, one’s local supermarket could offer some slow moving products on major price-off sale (from 20 to 50% off) or provide discounts to frequent buyers (maybe through accumulating points which could be redeemed as cash on the next shopping).

These strategies would ensure that slow moving products could be purchased and the points system would not entail costs to the supermarket which could lessen their profits.3. What advantages and disadvantages do you see for manufacturers to offer everyday low purchase prices to retailers? Are manufacturers and retailers pushing price so much that theyre in danger of lowering profits? Is this especially true on the Internet? Why is price competition so common?The advantages of offering everyday low purchase prices to retailers by manufacturers include selecting them as sources of products in volume, as against competitors not offering low prices.

The disadvantages include potentially lower profit potentials if the volumes of needed sales are not met.One believes that manufacturers and retailers make the necessary computations in volume-price effect of pushing price to achieve a target profit; otherwise, they would not offer this pricing strategy. This fact is applicable in any organizational setting and in various medium, including the internet. Price competition is so common because consumers are becoming price conscious and opts to purchase products that are perceived to be the cheapest but provides the value needed by the consumers.