Skip to main content
SpringerLink
Log in

Price Management for Retailers

  • Chapter
  • First Online:
Price Management

  • 8046 Accesses

Abstract

This chapter addresses the special characteristics of retail price management. For many retailers, price is the most important and most effective competitive instrument. Price differences in retail have a greater impact on profit than they do for industrial goods or services because of the low profit margins. The priority for retailers is their price positioning in terms of setting the overall price ranges for a store or outlet as well as for individual product categories. The price image of a retailer is extremely important and must be carefully managed. Because of the large assortments, consumers normally do not know each individual product price and therefore rely on the store’s price image for guidance. Retailers often have more information about consumers than manufacturers, but they only use this information to a limited extent for price setting. Information on competitors’ prices is easier to acquire in retail channels than in other sectors. Standard price strategies such as everyday low prices (EDLP) or Hi-Lo are common. Discounts have complex effects which are only partially understood and which are not completely measurable. Assortment effects play an important role in price setting for retailers but are also difficult to quantify.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 54.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Hardcover Book
USD 69.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Notes

  1. 1.

    ALDI has two operating units, ALDI North and ALDI South. In the United States, the former operates under the ALDI name, the latter under Trader Joe’s.

References

  1. Fassnacht, M., & El Husseini, S. (2013). EDLP vs. Hi-Lo Pricing Strategies in Retailing – A State of the Art Article. Journal of Business Economics, 83(3), 259–289.

    Article  Google Scholar 

  2. Anonymous. (2015, November 4). Amazon eröffnet ersten eigenen Laden. Frankfurter Allgemeine Zeitung, p. 19.

    Google Scholar 

  3. Wingfield, N. and de la Merced, M. J. (2017). Amazon to buy Whole Foods for $13.4 Billion. https://www.nytimes.com/2017/06/16/business/dealbook/amazon-whole-foods.html. Accessed 28 February 2018.

  4. Schuckmann, E. (2015). Shopping Enjoyment: Determinanten, Auswirkungen und moderierende Effekte. Frankfurt am Main: Lang.

    Book  Google Scholar 

  5. Hoch, S. J., Drèze, X., & Purk, M. E. (1994). EDLP, Hi-Lo, and Margin Arithmetic. Journal of Marketing, 58(4), 16–27.

    Article  Google Scholar 

  6. Haucap, J., Heimeshoff, U., Klein, G. J., Rickert, D., & Wey, C. (2014). Wettbewerbsprobleme im Lebensmitteleinzelhandel. In P. Oberender (Ed.), Wettbewerbsprobleme im Lebensmitteleinzelhandel (pp. 11–38). Berlin: Dunckler & Humblot.

    Google Scholar 

  7. EHI Europäisches Handelsinstitut. (2010). Handel aktuell 2009/2010. Köln: EHI.

    Google Scholar 

  8. Lademann, R. (2013). Wettbewerbsökonomische Grundlagen des Betriebsformenwettbewerbs im Lebensmitteleinzelhandel. In H.-C. Riekhof (Ed.), Retail Business. Perspektiven, Strategien, Erfolgsmuster (3. ed., pp. 3–30). Wiesbaden: Gabler.

    Google Scholar 

  9. Kowitt, B. (2014, April 28). Whole Foods Takes Over America. Fortune. pp. 28–35.

    Google Scholar 

  10. Humphers, L. (2015). Betting on outlets – 2015 State of the Outlet Industry. https://www.icsc.org/vrn/uploads/2015_VRN_State_of_the_Outlet_Industry_story.pdf. Accessed 28 February 2018.

  11. Mueller-Hagedorn, L. (2017, August 28) Outlet-Center fordern Innenstaedte heraus, Frankfurter Allgemeine Zeitung, p. 16

    Google Scholar 

  12. Statista (2016). Online Anteil am Umsatz im Einzelhandel in den USA. https://de.statista.com/statistik/daten/studie/379363/umfrage/online-anteil-am-umsatz-im-einzelhandel-in-den-usa/. Accessed 28 December 2016.

  13. Anonymous. (2015, February 19). Ich glaube an das gedruckte Buch. Frankfurter Allgemeine Zeitung (FAZ), p. 11.

    Google Scholar 

  14. Walmart (2017). Annual Report 2017. http://s2.q4cdn.com/056532643/files/doc_financials/2017/Annual/WMT_2017_AR-(1).pdf. Accessed 28 February 2018.

  15. Statista (2018). Net sales revenue of Amazon from 2004 to 2017 (in billion U.S. dollars. https://www.statista.com/statistics/266282/annual-net-revenue-of-amazoncom/. Accessed 28 February 2018.

  16. Otto Group (2017). Annual Report 2016/17. https://www.ottogroup.com/media/docs/en/geschaeftsbericht/Otto_Group_Annual_Report_16_17_EN.pdf. Accessed 13 March 2018.

  17. Alibaba Group (2017). Alibaba Group Announces March Quarter 2017 and Full Fiscal Year 2017 Results. http://www.alibabagroup.com/en/news/press_pdf/p170518.pdf. Accessed 13 March 2018.

  18. Kilian, K. (2015, January). Showrooming. Absatzwirtschaft, p. 9.

    Google Scholar 

  19. Fassnacht, M., & Szajna, M. (2014). Shoppen ohne einzukaufen – Der Trend Showrooming im Einzelhandel. In R. Gössinger, & G. Zäpfel (Ed.), Management integrativer Leistungserstellung. Festschrift für Hans Corsten. Betriebswirtschaftliche Schriften (Volume 168, pp. 287–304). Berlin: Duncker & Humblot.

    Chapter  Google Scholar 

  20. Spivey, S. (2016). Consumers have spoken: 2016 is the year of “webrooming”. https://marketingland.com/consumers-spoken-2016-year-webrooming-180125. Accessed 13 March 2018.

  21. Graham, S. (2017). Using Competitive Online Pricing to Drive In-Store Sales. https://www.growthmattersnetwork.com/story/using-competitive-online-pricing-to-drive-in-store-sales/?source=social-global-voicestorm-None&campaigncode=CRM-YD18-SOC-GETSOC. Accessed 13 March 2018.

  22. Nyström, H. (1970). Retail Pricing – An Integrated Economic and Psychological Approach. Stockholm: Economic Research Institute, Stockholm School of Economics.

    Google Scholar 

  23. Hamilton, R., & Chernev, A. (2013). Low Prices Are Just the Beginning: Price Image in Retail Management. Journal of Marketing, 77(6), 1–20.

    Article  Google Scholar 

  24. GMI Global Market Insite (2014). Internet World Business: Wer den Cent nicht ehrt. http://heftarchiv.internetworld.de/2014/Ausgabe-14-2014/Wer-den-Cent-nicht-ehrt2. Accessed 10 March 2015.

  25. Anonymous. (2015, November 02). Amazon lässt die Preise schwanken. Frankfurter Allgemeine Zeitung, p. 26.

    Google Scholar 

  26. Riedl, A.-K. (2015). Studie zeigt: Preise bei Amazon schwanken um bis zu 240 Prozent. The Huffington Post. 25.02. http://www.huffingtonpost.de/2015/02/25/zockt-uns-amazon-ab_n_6749748.html?utm_hp_ref=germany. Accessed 20 March 2015.

  27. ZDF WISO (n.d.). Preis € Wert – So dynamisch sind die Preise im Netz. http://module.zdf.de/wiso-dynamische-preise-im-netz/. Accessed 13 March 2018.

  28. Schindler, H. (1998). Marktorientiertes Preismanagement. St. Gallen: Schindler.

    Google Scholar 

  29. Müller, I. (2003). Die Entstehung von Preisimages im Handel. Nürnberg: GIM.

    Google Scholar 

  30. Fishmann, J. (2017). Amazon, the Price Perception Leader. https://www.gapintelligence.com/blog/2017/amazon-com-the-price-perception-leader. Accessed 13 March 2018.

  31. Diller, H. (2008). Preispolitik (4 ed.). Stuttgart: Kohlhammer.

    Google Scholar 

  32. Kenning, P. (2003). Kundenorientiertes Preismanagement: Ein Beitrag zur Renditenverbesserung im Handel. In D. Ahlert, R. Olbrich, & H. Schröder (Ed.), Jahrbuch Vertriebs- und Handelsmanagement (pp. 85–102). Frankfurt am Main: Deutscher Fachverlag.

    Google Scholar 

  33. Authors’ own study, prices as of December 6, 2017.

    Google Scholar 

  34. Fassnacht, M. (2003). Eine dienstleistungsorientierte Perspektive des Handelsmarketing. Wiesbaden: Deutscher Universitäts-Verlag.

    Book  Google Scholar 

  35. Adlwarth, W. (2014). No-Names drängen stärker in die “Feine Welt”. Lebensmittelzeitung.net. http://www.lebensmittelzeitung.net/business/themen/maerkte-marken/protected/Handelsmarken-_130_15510.html?dossierid=130&tid=104958&page=1 (Created 16 May). Accessed 11 March 2015.

  36. Statista (2018). Marktanteile von Hersteller- und Handelsmarken in Deutschland in den Jahren 2012 bis 2017. https://de.statista.com/statistik/daten/studie/205728/umfrage/marktanteilsentwicklung-von-mehrwert-handelsmarken/. Accessed 13 March 2018.

  37. Novich, N. S. (1981). Price and Promotion Analysis Using Scanner Data: An Example. Master’s Thesis. Sloan School of Management. Massachusetts Institute of Technology.

    Google Scholar 

  38. Haucap, J., & Klein, G. J. (2012). Einschränkungen der Preisgestaltung im Einzelhandel aus wettbewerbsökonomischer Perspektive. In D. Ahlert, P. Kenning, R. Olbrich, & H. Schröder (Ed.), Vertikale Preis- und Markenpflege im Kreuzfeuer des Kartellrechts (pp. 169–186). Wiesbaden: Springer Gabler. Forum Vertriebs- und Handelsmanagement.

    Chapter  Google Scholar 

  39. Pezoldt, K., & Gebert, R. (2011). RFID im Handel – Vor- und Nachteile aus Unternehmens- und Kundensicht. In N. Bach, G. Brähler, G. Brösel, D. Müller, & R. Souren (Ed.), Ilmenauer Schriften zur Betriebswirtschaftslehre Volume 8/2011 Ilmenau: VERLAG proWiWi e.V.

    Google Scholar 

  40. Talukdar, D., Gauri, D. K., & Grewal, D. (2010). An Empirical Analysis of the Extreme Cherry Picking Behavior of Consumers in the Frequently Purchased Goods Market. Journal of Retailing, 86(4), 337–355.

    Article  Google Scholar 

  41. Preuss, S. (2015, July 18). Kaufland will lokalen Anbietern eine Chance geben. Frankfurter Allgemeine Zeitung, p. 25.

    Google Scholar 

  42. Gabor, A. (1988). Pricing: Concepts and Methods for Effective Marketing (2 ed.). Hants: Gower.

    Google Scholar 

  43. Holdren, B. R. (1960). The Structure of a Retail Market and the Behavior of Retail Units. Englewood Cliffs: Prentice-Hall.

    Google Scholar 

  44. Holton, R. H. (1957). Price Discrimination at Retail: The Supermarket Case. Journal of Industrial Economics, 6(1), 13–32.

    Article  Google Scholar 

  45. Monroe, K. B. (2003). Pricing: Making Profitable Decisions (3 ed.). Boston: McGraw-Hill.

    Google Scholar 

  46. Preston, L. E. (1963). Profits, Competition and Rules of Thumb in Retailing Food Pricing. Berkeley: University of California.

    Google Scholar 

  47. ALDI Süd (2015). Aldi Süd Philiosophie. https://unternehmen.aldi-sued.de/de/ueber-aldi-sued/philosophie/ (Created 23 February). Accessed 09 March 2015.

  48. Simon, H. (2016). Negative Prices – A New Phenomenon, The Journal of Professional Pricing, Fourth Quarter 2016, pp. 18–21

    Google Scholar 

  49. Anonymous. (2007). Pressemeldung des Bundeskartellamtes vom 30.10.2007: Bundeskartellamt setzt klaren Maßstab für das Unter-Einstandspreis-Verbot. http://www.advokat.de/infodienst/startseite/marken-und-wettbewerbsrecht/marken-und-wettbewerbsrecht/datum/2007/11/04/bundeskartellamt-setzt-klaren-massstab-fuer-das-unter-einstandspreis-verbot/. Accessed 27 May 2015.

  50. Rode, J. (2014). Kaiser’s testet individuelle Coupons. Lebensmittelzeitung.net. http://www.lebensmittelzeitung.net/news/it-logistik/protected/Kaisers-testet-individuelle-Coupons_105434.html?id=105434 (Created 12 June). Accessed 5 May 2015.

  51. Ailawadi, K. L., Harlam, B. A., César, J., & Trounce, D. (2007). Quantifying and Improving Promotion Effectiveness at CVS. Marketing Science, 26(4), 566–575.

    Article  Google Scholar 

  52. Bolton, R. N., Shankar, V., & Montoya, D. Y. (2006). Recent Trends and Emerging Practices in Retailer Pricing. In M. Krafft, & M. K. Mantrala (Ed.), Retailing in the 21st Century: Current and Future Trends (pp. 255–270). Wiesbaden: Gabler.

    Chapter  Google Scholar 

  53. dm (2015). Der günstige dm-Dauerpreis. http://www.dm.de/de_homepage/services/service_erleben/dm_dauerpreis_garantie/. Accessed 04 May 2015.

  54. Hanssens, D. (Ed.) (2015). Empirical Generalizations about Marketing Impact. Cambridge, MA.: Marketing Science Institute.

    Google Scholar 

  55. Kaiser, T. (2014). Direct-Mail-Couponing: Eine empirische Untersuchung der langfristigen Absatzwirkung. Wiesbaden: Springer Gabler.

    Book  Google Scholar 

  56. Fassnacht, M., & Königsfeld, J. A. (2015). Sales Promotion Management in Retailing: Tasks, Benchmarks, and Future Trends. Marketing Review St. Gallen, 32(3), 68–77.

    Article  Google Scholar 

  57. Wagner, U., Jamsawang, J., & Seher, F. (2012). Preisorientierte Aktionspolitik. In J. Zentes, B. Swoboda, D. Morschett, & H. Schramm-Klein (Ed.), Handbuch Handel (pp. 585–607). Wiesbaden: Springer Gabler.

    Chapter  Google Scholar 

  58. Ivens, B. (2013). Geleitwort zu: T. Kaiser. Direct-Mail-Couponing: Eine empirische Untersuchung der langfristigen Absatzwirkung. Wiesbaden: Springer Gabler.

    Google Scholar 

  59. Fassnacht, M., & Königsfeld, J. A. (2014). Wertschöpfung im Handel durch Preismanagement. In W. Reinartz, & M. Käuferle (Ed.), Wertschöpfung im Handel (pp. 62–83). Stuttgart: Kohlhammer.

    Google Scholar 

  60. Gedenk, K. (2003). Preis-Promotions. In H. Diller, & A. Herrmann (Hrsg.), Handbuch Preispolitik: Strategien – Planung – Organisation – Umsetzung (pp. 597–622). Wiesbaden: Gabler.

    Chapter  Google Scholar 

  61. Chandon, P., & Wansink, B. (2011). Is Food Marketing Making Us Fat? A Multi-Disciplinary Review. Foundations and Trends in Marketing, 5(3), 113–196.

    Article  Google Scholar 

  62. DelVecchio, D., Krishnan, H. S., & Smith, D. C. (2007). Cents or Percents? The Effects of Promotion Framing on Price Expectations and Choice. Journal of Marketing, 71(3), 158–170.

    Article  Google Scholar 

  63. Lodish, L., & Mela, C. F. (2008). Manage Brands over Years, not Quarters. The Pricing Advisor. Marietta: Professional Pricing Society.

    Google Scholar 

  64. Xia, L., & Monroe, K. B. (2009). The Influence of Pre-Purchase Goals on Consumers’ Perceptions of Price Promotions. International Journal of Retail & Distribution Management, 37(8), 680–694.

    Article  Google Scholar 

  65. Yoon, S., Oh, S., Song, S., Kim, K. K., Kim, Y. (2014). Higher Quality or Lower Price? How Value-Increasing Promotions Affect Retailer Reputation Via Perceived Value. Journal of Business Research, 67(10), 2088–2096.

    Article  Google Scholar 

  66. Palmeira, M. M., & Srivastava, J. (2013). Free Offer ≠ Cheap Product: A Selective Accessibility Account on the Valuation of Free Offers. Journal of Consumer Research, 40(4), 644–656.

    Article  Google Scholar 

  67. Dubey, J. (2014). Personal Care Products: Sales Promotion and Brand Loyalty. Journal of Contemporary Management Research, 8(1), 52–71.

    Google Scholar 

  68. Swenson, D., Ansari, S., Bell, J., Kim, I.-W. (2003). Best Practices in Target Costing. Management Accounting Quarterly, 4(2), 12–17.

    Google Scholar 

  69. Universität Essen, & Mercer Management Consulting (2003). Retail-Studie – Preis- und Sortimentsmanagement als Erfolgshebel im Einzelhandel. https://www.cm-net.wiwi.uni-due.de/fileadmin/fileupload/BWL-MARKETING/Management_Summary_Retail_Studie_1_.pdf. Accessed 28 April 2015.

  70. Reimann, E. (2015, August 27). dm boykottiert Mogelpackungen. Generalanzeiger Bonn, p. 6.

    Google Scholar 

  71. Happel, S. (2015). Nun wird der Kunde ferngesteuert und vermessen, Wirtschaftswoche. http://www.wiwo.de/unternehmen/handel/smartphone-app-shopkick-nun-wird-der-kunde-ferngesteuert-und-vermessen/11223624-all.html (Created 15 January). Accessed 16 March 2015.

  72. Schröder, H. (2012). Handelsmarketing: Strategien und Instrumente für den stationären Einzelhandel und für Online-Shops (2. Aufl.). Wiesbaden: Springer Gabler.

    Google Scholar 

  73. Bauhaus (2015). Bauhaus Garantien. http://www.bauhaus.info/service/leistungen/garantien. Accessed 27 March 2015.

Download references

Author information

Authors and Affiliations

  1. Simon-Kucher & Partners Strategy and Marketing Consultants, Bonn, Germany

    Hermann Simon

  2. WHU – Otto Beisheim School of Management, Chair of Marketing and Commerce, Düsseldorf, Germany

    Martin Fassnacht

Authors
  1. Hermann Simon
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Martin Fassnacht
    View author publications

    You can also search for this author in PubMed Google Scholar

Rights and permissions

Reprints and permissions

Copyright information

© 2019 Springer Nature Switzerland AG

About this chapter

Check for updates. Verify currency and authenticity via CrossMark

Cite this chapter

Simon, H., Fassnacht, M. (2019). Price Management for Retailers. In: Price Management. Springer, Cham. https://doi.org/10.1007/978-3-319-99456-7_13

Download citation

Publish with us

Policies and ethics

Search

Navigation