RMG 400 Lecture : Pricing/Promoting

• School: Ryerson University
• Department: Retail Management
• Course: RMG 400
• Professor: Bharat Sud

Document Summary

Establishing retail prices: retail price includes cost of merchandise, and additional amount known as markup, the amount of markup must include enough to cover expenses (fixed and variable) and planned profit, retail price = cost + markup. Planning initial markup percentage: determining the first markup place on products when they enter retail store, elements of calculation are sales, expenses, profit, and reductions (markdowns, discounts) Initial markup percent = (expenses + profit + reductions + discounts) / (sales + Factors affecting retail price: target market, store policies, competition, economic conditions. Loss leaders low margins, low cost producers: skimming, penetration start with a low price, odd-cent pricing (. 99, . 87, even pricing pricing at a round or even number, price lining. Markdown formulas: markdown percentage = markdown dollars / retail sales, off retail percentage = markdown dollars / original retail. Improve / maintain market share: maximize profits, meet / beat the competition, achieve a target return, stabilize prices www. notesolution. com.