RMG 400 Lecture Notes - Lecture 6: Markdown, Shoplifting, Price Floor

• School: Ryerson University
• Department: Retail Management
• Course: RMG 400
• Professor: Janice Rudkowski

Document Summary

Week 6 chapter 15: pricing the merchandising. Pri(cid:272)i(cid:374)g is i(cid:373)porta(cid:374)t be(cid:272)ause : quantifies value of product or service, attracts the right customers, determines how much will be sold, establishes competitive positioning within marketplace, delivers profits. Initial markup percentage = (expenses + profit + reductions cash discounts)/(sales + reductions) Planned reductions: markdowns (i. e. da(cid:373)aged (cid:373)er(cid:272)ha(cid:374)dise, redu(cid:272)ed to (cid:272)lear i(cid:374)(cid:448)e(cid:374)tor(cid:455) , shrinkage (i. e. employee theft, shoplifting, employee or senior discounts (i. e. dm has (cid:862) e(cid:374)ior da(cid:455)s(cid:863)) Cash discounts: note: cash discounts are provided by some vendors to retailers who pay for merchandise early, cash dis(cid:272)ou(cid:374)ts redu(cid:272)e a retailer"s total e(cid:454)pe(cid:374)ses cash discounts are subtracted from sales, in the initial markup formula. Factors affecting retail price: merchandise and prices offered, a minimum or price floor, target market, store policies (regarding price), competition, economic conditions, (cid:448)e(cid:374)dor"s distri(cid:271)utio(cid:374) poli(cid:272)ies, (cid:448)e(cid:374)dor"s reputatio(cid:374) a(cid:374)d relia(cid:271)ilit(cid:455) terms offered services offered. Target market: understand how your store is positioned in the marketplace and how your customers view price.