High–low pricing (or hi–low pricing) is a type of pricing strategy adopted by companies, usually small and medium-sized retail firms, where a firm initially charges a high price for a product and later, when it has become less desirable, sells it at a discount or through clearance sales.[1]
Prospective customers may be unaware of a product's typical market price, or have a strong belief that "discount" is synonymous with "low price", or have strong loyalty to the product, brand or retailer.[2] High–low pricing strategy is effective because of consumer preference and shopping frequency. Consumers with higher income strongly prefer the high-low pricing and they shop frequently in the brand stores they like.[3]
There are many big firms using this type of pricing strategy (including, in North America, Reebok, Nike, and Target). Competition in shoemaking and the fashion industry is partly through high–low pricing (for example Macy's, Nordstrom). But some firms will not provide discounts and work on a fixed rate of earnings following everyday low price strategies to compete in the market.
An alternative way to use high–low pricing is to increase the price for a short time, sometimes as much as 500 per cent, after which it is "discounted" to what its normal selling price.[4] After the price is reduced to the "sale" price, it may often stay at that price for a long time, sometimes longer than two weeks, after which customers may begin to question whether the reduction is genuine.[5] Artificial discounts of this sort are illegal in the United Kingdom.[6]
^Kaufmann, Patrick (1994). "Deception in Retailer High–Low Pricing: A 'Rule of Reason' Approach". Journal of Retailing. 70 (2): 115–138. doi:10.1016/0022-4359(94)90011-6.
^"High-Low Pricing - AccountingTools". www.accountingtools.com. Retrieved 1 October 2016.
^Fassnacht, Martin; El Husseini, Sabine (April 2013). "EDLP Versus Hi–Lo Pricing Strategies in retailing – a State of the Art Article". Journal of Business Economics. 83 (3): 259–289. doi:10.1007/s11573-012-0648-y. ISSN 0044-2372. S2CID 255309120.
^"Ratgeber & Kaufempfehlungen". www.bestsellerkaufen.de. Retrieved 1 October 2016.
^"The Psychology of Retail: How Pricing Affects Buying BehaviorRunning". CC. April 12, 2013. Retrieved 18 July 2013.
^Mackie, Phil. "Tesco Fined over 'Half-Price' Strawberries Claim". BBC News. Retrieved 2016-05-28.
External linksedit
Price control
CFI
aktuelle Gutscheine (in German)
History (in French)
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high, pricing, pricing, type, pricing, strategy, adopted, companies, usually, small, medium, sized, retail, firms, where, firm, initially, charges, high, price, product, later, when, become, less, desirable, sells, discount, through, clearance, sales, prospect. High low pricing or hi low pricing is a type of pricing strategy adopted by companies usually small and medium sized retail firms where a firm initially charges a high price for a product and later when it has become less desirable sells it at a discount or through clearance sales 1 Prospective customers may be unaware of a product s typical market price or have a strong belief that discount is synonymous with low price or have strong loyalty to the product brand or retailer 2 High low pricing strategy is effective because of consumer preference and shopping frequency Consumers with higher income strongly prefer the high low pricing and they shop frequently in the brand stores they like 3 Contents 1 Usage 2 See also 3 References 4 External linksUsage editThere are many big firms using this type of pricing strategy including in North America Reebok Nike and Target Competition in shoemaking and the fashion industry is partly through high low pricing for example Macy s Nordstrom But some firms will not provide discounts and work on a fixed rate of earnings following everyday low price strategies to compete in the market An alternative way to use high low pricing is to increase the price for a short time sometimes as much as 500 per cent after which it is discounted to what its normal selling price 4 After the price is reduced to the sale price it may often stay at that price for a long time sometimes longer than two weeks after which customers may begin to question whether the reduction is genuine 5 Artificial discounts of this sort are illegal in the United Kingdom 6 See also editPricing strategiesReferences edit Kaufmann Patrick 1994 Deception in Retailer High Low Pricing A Rule of Reason Approach Journal of Retailing 70 2 115 138 doi 10 1016 0022 4359 94 90011 6 High Low Pricing AccountingTools www accountingtools com Retrieved 1 October 2016 Fassnacht Martin El Husseini Sabine April 2013 EDLP Versus Hi Lo Pricing Strategies in retailing a State of the Art Article Journal of Business Economics 83 3 259 289 doi 10 1007 s11573 012 0648 y ISSN 0044 2372 S2CID 255309120 Ratgeber amp Kaufempfehlungen www bestsellerkaufen de Retrieved 1 October 2016 The Psychology of Retail How Pricing Affects Buying BehaviorRunning CC April 12 2013 Retrieved 18 July 2013 Mackie Phil Tesco Fined over Half Price Strawberries Claim BBC News Retrieved 2016 05 28 External links editPrice control CFI aktuelle Gutscheine in German History in French nbsp This economics related article is a stub You can help Wikipedia by expanding it vte Retrieved from https en wikipedia org w index php title High low pricing amp oldid 1187197449, wikipedia, wiki, book, books, library,
