Pricing Misconceptions

Because products are priced lower, does not mean that they are less profitable. There are several example of big name discount retailers and low fair airline companies that are known for low prices, but that are also among the most profitable in their respective segments.


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How do pricing strategies work in the stores we frequent? Cost-Driven, Customer Driven, Competition Driven have been the most prevalent pricing philosophies over the last few decades. This assignment requires the collection of primary data from two of the same stores in two different neighborhoods.
Drug stores and discount chains and superstores are the best choices for this assignment.

  • To prepare for your onsite data collection, go to this linkor another source like it, and research the two zip codes within which the target stores are located.
    • DO NOT copy the tables form the website, but share some pertinent points regarding the areas’ demographics that you believe would affect the way pricing decisions are made.
  • Research the regular prices for 5 of brand name products in the two stores.
    • The items should be exactly the same size, flavor, color, etc. Select products from different categories to see if there is a difference in pricing between the two store units.
    • HINT: collect prices on more than 5 items in store #1, just in case store #2 does not carry an item you selected. It may save a return trip.
  • Apply the pricing strategies studied to the actual pricing in the stores. For each set of items, answer the following questions:
    • What pricing strategy is used?
    • What factors where used to determine the pricing strategy?
    • Do you think this was an effective pricing strategy? Why or why not?

Your analysis must be substantiated by research from graduate-level resources such as the course text or articles from the library’s full-text databases.

This post should be 3 paragraphs in length (300 words). Since you are engaging in research, be sure to cite and reference the source(s) in APA format.

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