RMG 200 Chapter Notes - Chapter 12: Canadian Dollar, Variable Pricing, Shoplifting

• School: Ryerson University
• Department: Retail Management
• Course: RMG 200
• Professor: Brent Bar

Document Summary

Value - relationship between what a customer gets (goods/services) and what he or she has to pay for it. Retailers want to set prices to maximize long-term profits. To do this, they need to consider the following: cost, of the merchandise and services: demand, the price sensitivity of consumers competition, because customers shop around and compare prices legal considerations. Cost-oriented method - a method for determining the retail price by adding a fixed percentage to the cost of the merchandise; also known as cost-plus pricing. Keystone method - a method of setting retail prices in which retailers simply double the cost of the merchandise to obtain the original retail selling price. Demand-oriented method - a method of setting prices based on what the customers would expect or be willing to pay. Competition-oriented method - a pricing method in which a retailer uses competitors" prices, rather than demand or cost considerations, as guides.