Question

The manager of a local convenience store is expanding his line of small toy items. To price these new items, the manager is looking at the prices being charged by competing retailers in his area. For the popular “Titan Joe Action Figure,” he has observed the following prices:

Downtown department store: $14.00

Chain drug store: $11.99

Well-known local variety store $10.99

Large discount department store: $9.97

Discount toy store $9.55

If the manager is inclined to use parity pricing, what price should he set for the Titan Joe Action Figure? Explain your reasoning.

Answer 1

In today's world, business is very much competitive. People go for the products which have the lowest price and also the least will be monitored. Since the store is trying for an expansion they must try to attract the customers by quoting with the lowest price available in the market. Because customers are very much clever and updated nowadays. So, in my opinion, it is advisable to keep in my about the products purchase cost and also the charge for shipping.According to parity pricing, the amount should be equal everywhere ie, in case if they are selling in online market platforms. So, according to me as they have entered in the market they can go with the lowest price which is $9.50 and must watch the pricing daily for a regular consistency.