Service Selection
Customers shop with retailers that provide
services comparable to the prices they are
paying. The amount of service corresponds
with the price/quality level, whether self-service,
limited service, or full-service. The services
mix is one of the key nonprice tools for setting
retailers apart from each other. For instance,
companies might decide to lengthen their credit
payment terms or extend their evening hours to
differentiate their store from their competitors.
Discount stores, featuring low prices,
offer only basic customer services, such as
free parking, credit, and merchandise return
privileges. Traditional department stores
provide additional customer services, such as
gift wrapping, repair services, and alterations.
Exclusive stores might provide special services,
such as a store employee delivering an evening
dress and making sure it fi ts the customer
properly, or helping a customer coordinate a
dress, shoes, and jewelry.
Services encourage customers to stay in
the store as long as possible. The store provides
all the needed services to keep customers there
to make more purchases. They don’t have to
leave to put money in a parking meter or use a
rest room elsewhere. Customer services will be
discussed more completely later in this textbook.
Price Strategy
Pricing policies determine the price levels at
which retailers sell their merchandise. A retailer’s
pricing policy must be coordinated with its image
since the price level of goods plays an important
part in determining the kinds of customers
a business will attract and keep. See 13-16.
Retailers’ “price points” indicate the amount of
money at which items are offered for sale. Pricing
is a key positioning factor and must be decided
in relation to the target market, competition, and
other marketing mix factors. It is imperative that
retail companies select the most appropriate
competitive pricing strategy for their market.
Choosing the correct approach to pricing has a
large effect on profi ts.
Currently, most retailers emphasize low
price as a major appeal to customers. The price-
value relationship has become a powerful buying
incentive. Price-conscious consumers actively
Stock Assortment Breadth and Depth
(A)
Broad
and
shallow
(B)
Narrow
and
deep
(C)
Moderate
breadth
and
depth
Depth
Depth
Depth
Breadth
Breadth
Breadth
13-15 A long horizontal line of representative
squares indicates many categories of
goods (A). Tall vertical columns of squares
show that many items in each category are
stocked (B). A compromise approach (C)
shows equal consideration of breadth and
depth.
13-16 Some retailers use their name to
indicate to consumers that their price level
is low.
Chapter13.indd 261 Chapter13.indd 261 3/21/2008 3/21/2008