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Ch. 10 Pricing Wal-Mart vs. Target Price Comparison. Sandy Burnett Chelsee Nielsen. Chapter 10 Key Points:. Interaction Between Pricing Objectives and Other Decisions:. Pricing Objectives:. Target Return Objectives Profit Maximization Objectives Skimming Objectives

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Presentation Transcript
chapter 10 key points
Chapter 10 Key Points:

Interaction Between Pricing Objectives and Other Decisions:

pricing objectives
Pricing Objectives:
  • Target Return Objectives
  • Profit Maximization Objectives
  • Skimming Objectives
  • Penetration Objectives
  • Sales-Oriented Objectives
  • Status-Quo Objectives
pricing policies
Pricing Policies:
  • Pricing Above the Market
  • Pricing at the Market Level
  • Pricing Below the Market
specific pricing strategies
Specific Pricing Strategies:

Customary Pricing

Variable Pricing

Flexible Pricing

One-Price Pricing

Price Lining

Trading Up

Trading Down

Multiple-Unit Pricing

Bundle Pricing

Leader Pricing

Loss leader Pricing

High-Low Pricing

Bait and Switch

Pricing

Private Label

Pricing

slide7
vs.

“Expect More Pay Less”

4th Largest Retailer in U.S.

Target Market:

Urban communities

Middle-aged, on-the-go women

with children looking for

convenience & value but also

keeping up to date with the

hottest trends.

Income level: $30,000 & up

“Always low prices”

World’s Largest Retailer

Target Market:

Rural communities

Middle-aged, on-the-go women

with children looking for

convenience, & value while

keeping within their household

budget.

Income level: $35,000 & below

slide8
vs.

Perceived Marketing Position:

Offering merchandise at low

prices with more of a trendy flare.

Earned reputation of offering

trendier merchandise, cleaner

environment, and better service

than their competitor

Perceived Marketing Position:

Offering merchandise at low

prices

Earned reputation of always

offering the lowest prices

against competitors

wal mart vs target customer remarks
Wal-Mart vs. TargetCustomer Remarks:
  • “You know why Target is so clean? No one shops there,

so there’s no one to mess things up.”

  • “I’ve always found cheaper prices at Wal-Mart”
  • “Where Wal-Mart has that dollar-store vibe, Target makes you feel as though you are shopping at some sleek, upscale city shop.”
  • “Where Wal-Mart has dingy aisles loaded with cast-offs and marked down boxes of cereal, Target has perfectly packaged goodies all lined up in a row.”
  • “Wal-Mart has cashiers who look like they'd rather shoot you than serve you. Everyone smiles at Target.”
  • “Wal-Mart has those annoying senior-citizen greeters at the door, who scare the crap out of your teenage daughter when they remark how well-developed she is, or who insist so hard that you take their damn flier that they will follow you around the store and stick one down your pants if they have to.”
slide10

vs.

Article:From Cockeyed.com hosted by Fatwallet.com which is a internet source for retailer ratings, price comparisons, and cash back programs

  • Conducted a price comparison between Target and Wal-mart over a 20 item shopping list in stores in Sacramento, California.

List:included variety of items fromeach product category:

Apparel Electronics

Domestics Hardware

Consumables Housing

Chemicals Entertainment

Health & Beauty Sporting Goods

wal mart wins but not by much
Wal-mart Wins. But Not By Much:
  • Wal-mart had a lower price for the total of all 20 items. The

Wal-mart advantage for this batch was $4.89, or 4.06% of

the total price. 

  • Wal-mart had a lower price on 12 of the 20 items. Their

mean price advantage on these 12 was 81 cents, but  the

difference was usually less than a quarter.

  • Target had a lower price on only six items. The mean price

advantage on these six was also 81 cents, but the median

advantage was 55 cents.

sandy chelsee s price comparison
Sandy & Chelsee’s Price Comparison:

Target:

Herbal Essence Shampoo, $ 2.94

(Standard size)

Crest White Strips $24.89

Revlon Nail Polish $ 2.89

Revlon Curling Iron $12.99

Ruffles $ 2.24

Pack of Coke (12) $ 3.33

Hammer (lowest price) $ 3.99

Women’s jeans (lowest price) $13.99

National Treasure DVD $19.99

Kitchen Stool (lowest price) $15.00

Yoga Mat $19.99

Total $122.24

Wal-Mart:

Herbal Essence Shampoo, $ 2.84

(Standard size)

Crest White Strips $26.83

Revlon Nail Polish $ 3.88

Revlon Curling Iron $12.43 Ruffles $ 2.58

Pack of Coke (12) $ 3.50

Hammer (lowest price) $ 2.87

Women’s jeans (lowest price) $12.77

National Treasure DVD $19.88

Kitchen Stool (lowest price) $16.86

Yoga Mat $16.44

Total $120.88

price comparison2
Price Comparison

Grand Total of 11 items:

$120.88

Wal-Mart $1.36

$122.24

Wal-mart Wins. But Not By Much:

  • Wal-mart had a lower price for the total of all 20 items. The
  • Wal-mart advantage for this batch was $1.36, or 1.11% of
  • the total price. 
  • Wal-mart had a lower price on 6 of the 11 items. The mean price advantage on

the six items was $0.94.

  • Target had a lower price on 5 items. The mean price
  • advantage on these five was also $1.06 which is higher than Wal-Mart’s price
  • advantage
price comparison3
Price Comparison

Grand Total of 11 items:

Wal-Mart $1.36

$120.88

$122.24

Consumer Perception: Wal-mart always has the lowest prices on their merchandise.

Fact: Wal-mart does not always have the lowest prices on their merchandise.

  • Things to Consider When Price Comparing:
  • Individual Preference
  • Fashion
  • Quality
slide20

References:

www.cockeyed.com/citizen/target/walmart_versus_target01.html

Dunne, P., & Lusch, R. (2005). Retailing (5th ed.). South-

Western:Thompson.