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Defining the links between retail price strategies and price tactics
Dalarna University, School of Technology and Business Studies, Business Administration and Management.
Uppsala universitet.
2015 (English)Report (Other academic)
Resource type
Text
Abstract [en]

Retailers tend to become trapped in a price-promotion war where price issues are dealt with on a short-term basis, indicating almost solely tactical choices. Since price is the only part of the marketing mix providing direct revenues to the organisation, it should also be of strategic importance for the retailer. Not only in practice are price tactics often separated from pricing strategies, it is also the case in research where these are often studied in isolation from each other probably due to their individual complexity. This paper contributes to both the research area and practice by discussing these two complex areas together, and the essence of both strategy and tactics are defined. By considering the planning horizon for the retailer this paper further contributes by defining the links between price strategy and price tactic. The conclusion shows the importance of clearly establishing which analytical level is being analysed.

Place, publisher, year, edition, pages
HUI Research , 2015. no 110
Series
HUI Working Papers, ISSN 1653-1884 ; 110
Keyword [en]
retailing, price, strategy, tactic, analytical levels
National Category
Business Administration
Research subject
Complex Systems – Microdata Analysis
Identifiers
URN: urn:nbn:se:du-20770OAI: oai:DiVA.org:du-20770DiVA: diva2:893654
Available from: 2016-01-13 Created: 2016-01-13 Last updated: 2016-01-13Bibliographically approved
In thesis
1. Assumptions of retail price strategy and price tactic decisions
Open this publication in new window or tab >>Assumptions of retail price strategy and price tactic decisions
2015 (English)Licentiate thesis, comprehensive summary (Other academic)
Abstract [en]

This licentiate thesis sets out to analyse how a retail price decision frame can be understood. It is argued that it is possible to view price determination within retailing by determining the level of rationality and using behavioural theories. In this way, it is possible to use assumptions derived from economics and marketing to establish a decision frame. By taking a management perspective, it is possible to take into consideration how it is assumed that the retailer should strategically manage price decisions, which decisions might be assumed to be price decisions, and which decisions can be assumed to be under the control of the retailer. Theoretically, this licentiate thesis has its foundations in different assumptions about decision frames regarding the level of information collected, the goal of the decisions, and the outcomes of the decisions. Since the concepts that are to be analysed within this thesis are price decisions, the latter part of the theory discusses price decision in specific: sequential price decisions, at the point of the decision, and trade-offs when making a decision. Here, it is evident that a conceptual decision frame that is intended to illustrate price decisions includes several aspects: several decision alternatives and what assumptions of rationality that can be made in relation to the decision frame. A semi-structured literature review was conducted. As a result, it became apparent that two important things in the decision frame were unclear: time assumptions regarding the decisions and the amount of information that is assumed in relation to the different decision alternatives. By using the same articles that were used to adjust the decision frame, a topical study was made in order to determine the time specific assumptions, as well as the analytical level based on the assumed information necessary for individual decision alternatives. This, together with an experimental study, was necessary to be able to discuss the consequences of the rationality assumption. When the retail literature is analysed for the level of rationality and consequences of assuming certain assumptions of rationality, three main things becomes apparent. First, the level of rationality or the assumptions of rationality are seldom made or accounted for in the literature. In fact, there are indications that perfect and bounded rationality assumptions are used simultaneously within studies. Second, although bounded rationality is a recognised theoretical perspective, very few articles seem to use these assumptions. Third, since the outcome of a price decision seems to provide no incremental sale, it is questionable which assumptions of rationality that should be used. It might even be the case that no assumptions of rationality at all should be used. In a broader perspective, the findings from this licentiate thesis show that the assumptions of rationality within retail research is unclear. There is an imbalance between the perspectives used, where the main assumptions seem to be concentrated to perfect rationality. However, it is suggested that by clarifying which assumptions of rationality that is used and using bounded rationality assumptions within research would result in a clearer picture of the multifaceted price decisions that could be assumed within retailing. The theoretical contribution of this thesis mainly surround the identification of how the level of rationality provides limiting assumptions within retail research. Furthermore, since indications show that learning might not occur within this specific context it is questioned whether the basic learning assumption within bounded rationality should be used in this context.

Place, publisher, year, edition, pages
Örebro university, 2015
Series
Örebro Studies in Business, ISSN 1651-8888 ; 7
National Category
Business Administration
Research subject
Complex Systems – Microdata Analysis
Identifiers
urn:nbn:se:du-20771 (URN)
Available from: 2016-01-13 Created: 2016-01-13 Last updated: 2016-04-05Bibliographically approved

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http://EconPapers.repec.org/RePEc:hhs:huiwps:0110

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