Pricing

A well thought out pricing strategy plan is critical to a retailer’s failure and/or success. Choosing between a pricing and a non-pricing strategy really depends on the type of company and/or product you provide. Companies compete with one another by using pricing and non pricing strategies. For example, some strategies are used to promote unique products by lowering prices; the reduction in price offered must be low enough to draw in customers. Another pricing strategy is a form of cost in addition to pricing; meaning the total price of a product will make certain that all costs will be covered. By using this strategy a company can recoup the variable cost of that product including an impartial amount of the fixed costs as well. New York & Company positioned its stores as a source of value, fashion and quality by providing consumers with an assortment of merchandise at price points under those of competitor stores and other specialty retailers. New York & Company uses a mix of pricing strategies such as penetration pricing, competition based pricing and loss leader pricing. New York & Company utilizes penetration pricing to draw customers to unique or original products. This strategy provides a low price for unique merchandise during its initial offering in order to draw customers in and away from other retail competitors. Gould, M. (2008), stated this strategy tends to be used by companies attempting to enter a new market or desiring to build a small market share. A penetration strategy may also be used when a company wants to promote complimentary products. The main product is set at a low price in order to get customers to buy the accessories, which are sold at higher prices. By continuing to build on Brand name; this strategy will increase barriers to entry. Brand name is created and increased by substantial marketing, customer experience and to set apart the brand with a distinct value plan for the market. Intellectual property is an entry barrier that is already established by New York & Company. Intellectual property is one of the most efficient barriers particularly when protected with copyrights, trademarks and patents. The capability to and expenditure associated with creating resembling merchandise that do not breach on these protections form an excellent barrier to entry for future retail competitors. References Gould, M. (2008). Pricing Strategies. Pricing Strategies -- Research Starters Business, 1.