Pricing Strategies and Value Creations in Retailing

Abstract

As with any strategy, pricing is critical for business success, whether it is an Internet business or a traditional brick-and-mortar business. Price captures customers and retailers have to employ a wide range of retail pricing strategies to remain profitable and cope with intense competition. Although pricing strategies and value have been used extensively in numerous areas of marketing and retailing studies, the motivation behind the pricing strategies and tactics of retailers has not been well recognized in relation to other strategies. A number of questions were posed during the initial design of the research. What is an effective pricing strategy? What are the value creations strategies used in practice that have inspired this research? How does the chief criterion affect retailers in their price-setting practices, and why do retailers value their customers, competitors and channel collaboration as integrated with their non-price strategies in the business world? All the answers to these questions are sought in this thesis. I aim to determine the potential factors and processes affecting retail pricing, and the current literature and a pilot study have been used in the research. Twelve individual retail companies in New Zealand from four retail industries – namely, book retailing, sports & leisure, health & beauty and the food & café sectors, and those stores’ managers and/or owners – were invited to participate in this research. In order to avoid the bias of any single source, an exploratory case study approach has been applied, and an in-depth analysis of each company’s pricing was conducted from the data collected from interviews and observations in each research site. Content analysis for a systematic analysis of the qualitative data of publicity material and triangulation sources was also deployed. Just as importantly, this study drew a cross-case conclusion and developed implications for management decision-making and provided a direction for retail pricing in future research.