The Marketing Book 5th Edition

Retailing 795

Table 30.10 EDLP vs high–low pricing

Everyday low pricing High–low pricing

Reduced price wars Price discrimination: merchandise appeals to

multiple market segments

Reduced promotional advertising Creates excitement

More efficient use of store personnel All merchandise can be sold eventually

Improved inventory management Price confusion reduces awareness of prices

Increased profit margins High initial prices guide customers’ judgements of

The retailer can concentrate on being a seller, product and store quality

rather than a deal buyer EDLP can be extremely difficult to maintain

Less buyer time spent managing ‘sale’ events and

more time merchandising the entire line

More consumer appeal: price perceived as more

honest

Source: McGoldrick et al.(2000).

Table 30.11 Major retail advertisers

Retailer 1996 2000

(£ thousands) (£ thousands)

J. Sainsbury 20 669 33 293

B&Q 12 073 29 374

PC World 15 850 27 860

Currys 24 073 27 239

DFS Northern Upholstery 14 666 26 279

Homebase 6100 25 074

Comet 19 334 20 066

Tesco 15 006 19 532

Asda 14 253 17 787

Dixons 13 527 15 266

Iceland 10 680 14 784

Woolworths 9483 13 550

Boots the Chemists 8271 12 483

Source: Nielsen (2001).