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Pricing Is Not Only about Price: How Retailers Can Improve Their Price Image
Most retailers manage their price strategies without adequately factoring in nonmonetary costs and other elements of value that customers are consciously and subconsciously considering all the time, such as selection, promotions and quality of experience. This approach is no longer adequate. Companies need a new strategic model, one that expands the pricing strategy beyond the traditional pricing function to include several other partners within the enterprise. Based on our experiences with clients, a retailer that adopts a cross-functional and actionable “price+value” strategy can improve near-term earnings by as much as 4 percent and put the company on a much firmer competitive footing.