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We mentioned pricing strategies in class today and so I started thinking about the stores around us and what kind of pricing strategies they use. I decided to look at a big box store that is going to enter the Canadian market soon and as I wrote about Target earlier, I decided to do a part 2 for it (focusing on their price strategies)! We understand that Target is known for it’s economical prices and trendy merchandise and therefore we can see that Target is focusing on a sales-oriented pricing strategy. Sales-oriented pricing strategy was when the company focused more on increasing their sales and in turn will price their merchandise at a lower price in order to sell more in volume. Similar to their direct competitor Walmart, these big department or big box stores usually have their main pricing strategy as sales-oriented.
Aside from their main pricing strategy, we notice that Target may have used a combination of pricing strategies. Another pricing strategy that Target may be using is the customer-based pricing strategy. This is when a company focuses on its customers through quality service and matching up with their customer expectations. Target explained that they differed from their competitor Walmart as they had trained staff that was able to offer excellent customer service to help their customers when help was needed. Also, many customers are looking for more economical alternatives after the recession occurred (wealth-income effect) and therefore Target was able to meet customers’ needs (with products priced at a more economical price) in this way.