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Assignment : To Understand pricing strategies of a firm

Assignment : To Understand pricing strategies of a firm Firm Chosen : V S Stationers , Infocity, Gandhinagar. V S Stationers A retail shop set up in Infocity providing stationary goods

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Assignment : To Understand pricing strategies of a firm

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  1. Assignment: To Understand pricing strategies of a firm Firm Chosen: V S Stationers, Infocity, Gandhinagar

  2. V S Stationers • A retail shop set up in Infocity providing stationary goods • They deal with different kinds of paper, canvases, Stationary including colors , pens, trims, notebooks, folders etc. • Their main business is through supplying stationary to offices in Gandhinagar • They also cater to students from 12 colleges in the vicinity. • They acquire goods from the distribution channels laid across Baroda, Ahmedabad & Surat. • An important point of observation: In spite of having a healthy competition with Oxford Stationers in the same area most students choose V S Stationers and maintain a healthy loyalty of customers.

  3. V s Vs. Oxford OXFORD STATIONERS V S STATIONERS • V S develops a healthy bond by keeping low prices with students • Recovers most of the losses incurred with students through their main business with offices • Oxford offers the same goods at a higher price • Does not offer to give discount even though there are no real discounts.

  4. Pricing Strategy • Cost Plus Pricing • 20 % markup on non M.R.P. goods, 10-15% on M.R.P. goods PRICING STRATEGY

  5. Cost Plus Pricing • 12%-15 % on M.R.P. goods where the major profit goes to the company like Camel, Faber Castell etc. • 20% on non-M.R.P. goods like buttons, sequins, threads, papers etc. Maximize profit. • Observation of steady increase in prices of stationary in the past four years. • Eg. Artists water color increased their prices from Rs.250 to Rs.315 in the past four months.

  6. Price Discrimination • First degree: • Differentiation between each buyer. Ability to identify which entity will make considerable impact on the business. • Ability to distinguish between Regular customer and accidental shopper. • Does not usually spend that much time on accidental shopper • Inclined to charge more money from an accidental shopper • Second Degree • Differentiating as per consumption • Ability to identify price sensitive customer and maximize profits through non-M.R.P. goods • Builds on people willing to pay more for trims, paper etc.

  7. Peak Load Pricing In case of great demand of a material/product due to certain situations, they increase the price to gain profits. Especially on non-M.R.P. goods whose prices can be easily manipulated On a given day if the demand for bob-in pin is more, he sells a bob-in pin which is priced at Rs.10 for Rs.30, three times the price.

  8. Premium Pricing • For products like PARKER, LAMY pens and COPIC SKETCH PENS, which have a restricted niche market, the prices are fixed. • Although demand may exceed if prices are lowered but they want to limit their target market to that niche bracket where people are willing to pay high prices for the product.

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