Asked by Sophony Henri on Apr 24, 2024
Verified
What is the difference between an EDLP retailer and a high-low retailer? Why does Carmex charge them a different price?
EDLP Retailer
A retailer that consistently offers low prices across its products as part of its pricing strategy, avoiding traditional sales or discounts.
High-Low Retailer
A retail strategy where products are initially offered at high prices but then discounted heavily to stimulate sales, often seen in the fashion industry.
Carmex
A brand known for its lip balm products designed to moisturize, heal, and protect the lips.
- Examine the particular pricing tactics used by companies like Carmex for product pricing determination.
- Analyze assorted pricing techniques, encompassing predatory pricing, experience-curve pricing, skimming pricing, penetration pricing, and odd-even pricing, along with their strategic influence in the market.
Verified Answer
SG
Simran Gugnani7 days ago
Final Answer :
Everyday low price (EDLP) retailers, such as Walmart, offer consumers the lowest price every day without discounting through promotions. High-low retailers, such as Walgreens, charge consumers a higher price, but they occasionally discount the product through special promotions, which Carmex often supports with "marketing discretionary funds." Carmex typically offers its products at different prices to EDLP and high-low retailers to account for the promotional expenditures and to allow each retailer to reach profit margin goals.
Learning Objectives
- Examine the particular pricing tactics used by companies like Carmex for product pricing determination.
- Analyze assorted pricing techniques, encompassing predatory pricing, experience-curve pricing, skimming pricing, penetration pricing, and odd-even pricing, along with their strategic influence in the market.