Reflection and Discussion ForumWeek 9

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Chapter 12 is about More Realistic and Complex Pricing. More realistic and complex pricing is a pricing strategy that takes into consideration various factors and variables in order to determine the price of a product or service. This approach moves beyond the traditional methods of pricing, such as cost-plus pricing, by considering the market demand, competition, and consumer behavior as well. This type of pricing strategy is more realistic because it takes into account the actual market conditions, rather than relying solely on internal factors. It also recognizes that consumers are not always rational and will not always make purchasing decisions based on price alone. Complex pricing, on the other hand, takes into account a number of different factors that can influence the pricing of a product or service (Rachmawati et al., 2019). These factors can include market trends, consumer demographics, distribution channels, and the overall business strategy. Using a more realistic and complex pricing approach can result in a more accurate reflection of the actual value of a product or service, which can lead to increased profitability for the company. It also allows for flexibility in pricing, as factors such as changing market conditions and consumer behavior can be continuously monitored and adjusted accordingly. However, this approach can also be challenging as it requires a deeper understanding of the market and the ability to gather and analyze data effectively. It also requires a balance between setting a competitive price and ensuring profitability. Graduate-level response

Some high-end retailers place their most expensive products right in the entryway of the store, where consumers will see them first, and place their more popular, better-selling items further back. Why? High-end retailers strategically place their most expensive products at the front of the store for several reasons (Bai et al., 2021). First and foremost, this placement creates a sense of exclusivity and luxury for the consumers walking into the store. By showcasing their most high- end products first, the retailer is sending a message that the store values quality and extravagance. This can attract wealthy customers who are willing to spend money on luxury goods and are seeking a unique and exclusive shopping experience. Additionally, placing expensive products at the entryway is a marketing tactic used to entice consumers and create a sense of desire. When consumers see these high-priced items immediately upon entering the store, they may feel a sense of wanting and aspiration to own such luxurious products. This can lead them to explore the store further and potentially make a purchase, even if it’s not the most expensive item. Moreover, this positioning also serves as a status symbol for the brand and the customer. High-end retailers often have a reputation for catering to a wealthy and elite clientele. By showcasing their most expensive products at the front, it reinforces their position as a luxury brand and creates a sense of exclusivity for the customers who are able to purchase these items. This can also appeal to consumers who want to portray a certain lifestyle and status through their purchases. Another reason behind this strategic placement is to create a sense of anticipation and excitement for customers. Placing the most expensive products at the front captures the attention

of consumers and encourages them to explore the store further and see what else is available (Boardman & Mccormick, 2019). This sense of curiosity and discovery can lead to more sales and a longer browsing time in the store. On the other hand, placing the more popular and better-selling items further back allows the retailer to strategically guide customers through the store. By starting with the most expensive products, customers may be more likely to see the value in the lower-priced items located further into the store. This can lead to an increase in sales for these items and also allows the retailer to showcase a variety of products and cater to a wider range of customers.

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References Bai, H., McColl, J., Moore, C., He, W., & Shi, J. (2021). Direction of luxury fashion retailers' post-entry expansion–the evidence from China. International Journal of Retail & Distribution Management , 49 (2), 223-241. Boardman, R., & Mccormick, H. (2019). The impact of product presentation on decision-making and purchasing. Qualitative Market Research: An International Journal , 22 (3), 365-380. Rachmawati, D., Shukri, S., Azam, S., & Khatibi, A. (2019). Factors influencing customers’ purchase decision of residential property in Selangor, Malaysia. Management Science Letters , 9 (9), 1341-1348.

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