Page 170 - DMGT550_RETAIL_MANAGEMENT

Unit 9: Merchandise Management

“It would automatically create interest in the product. And from there salesmen can start Notes
their talk,” he said. The Bata price also had a psychological impact on the prospective
buyers as it fell short of an amount that might have looked like a high price.
Also, the price tag was devised to communicate to customers that Bata values even their
five paise. “We used to religiously return the five paise in those days when the coin was
available,” he said.
There is also an unconfirmed theory that Bata, then headquartered in Kolkata, came up
with a price of ` 124.95 to avoid an entry tax, which was levied on products priced at ` 125
and above.
Bata India officials said the company had decided to do away with the most distinctive
pricing in the country because the five paise coins have now gone out of circulation.
“Returning the five paise to customers was becoming an issue. There are people who
would insist on getting it back,” they said.
But the company did try to keep the price going by trying out various things. “We used to
offer customers candies, or told them that for every five paise they did not take back, we
would put another five paise and donate the amount to Missionaries of Charity. But we
realised later that no such thing was working,” they said.

Question:
Comment on Bata’s earlier ’95 paisa’ price tag. Are they right in doing away with it? What,
do you think, is the reason for doing this?

Source: thehindubusinessline.com
9.11 Summary

 Merchandise displays are special presentations of a store’s products or services to the buying
public. The nature of these displays may range somewhat from industry to industry, but all
merchandise displays are predicated on basic principles designed to increase product purchases.
 In assortment planning we use store grades as a way to reduce the number of decisions we
have to make. If we had to plan every store individually we would end up repeating
similar assortments many times. Planning at the store grade level allows us to be most
effective as a result of our efforts.

 When we are making decisions about assortments we are primarily deciding which items
will go to which stores in which periods.
 Pricing objectives are the goals that a retail company wishes to achieve through its pricing
policy. Pricing is the factor that makes a customer comfortable to a store.

 Because the retail market consists of competitors, consumers and suppliers, the retailer
should have various pricing objectives.
 For an independent retailer, increasing or decreasing prices can be helpful to increase the
store’s sales but for brands, such price fluctuations can be harmful even to the cost of out
of the market.

 In order to develop a pricing policy, retailers should consider several issues like deciding
on the target market, the merchandise to sell and geographical factors carefully to sustain
their customer base.

 Demand is based on the consumption patterns of the consumers. Sensitivity to price change
will vary from consumer to consumer. In a particular situation, the behavior of one
individual may not be the same as that of the other, and may not follow the ‘law of demand’.

LOVELY PROFESSIONAL UNIVERSITY 165