Pricing in Retail

Pricing in Retail

What you’ll learn to do: Identify how pricing fits into the goals of a retail establishment

We will take our candy store scenario a little further in this section as we learn about the definition of value, some basic retail pricing strategies we are probably all familiar with, and how pricing is an integral part of the retail mix strategy.


  • Define value
  • Differentiate between basic retail pricing strategies
  • Explain how pricing is integrated with the rest of the retail mix strategy

Defining Value

“Value” is an overused and under-understood term in business today. Since we are wearing a retailer hat, we want to focus on value as it relates to our customers. For customers then, value is the perceived monetary worth of the combination of product, service, and utility provided.

The term “value proposition” is also a heavily-trafficked term used by business people today. It can be best illustrated by a thought-scenario: You are shopping for media services to help you get the word out online about your new candy store. The first company comes to you with the following statement: “Trust me, our firm is number one and will give you the most for your money.” The second company comes to you with: “We can guarantee 200 clicks per day for every month of our contract.” Which value proposition would you be most impressed by?

For retailers, value can take on even more meaning. For example, there is a class of retail companies referred to as “value-price” retailers (generally discounted and/or inexpensive products). The largest home-shopping network uses value as part of their daily programming with a hook called “Today’s Special Value.” And when was the last time you were in a retail store and did not see some signage referring to “great value,” “best value,” or “value guarantee”? It is no wonder that our definition of “value” has become so murky.