Topic: Pricing Constraints

According to the authors of the book, Retailing (8th Edition), namely Patrick M. Dunne, Robert F. Lusch, and James R. Carver, the pricing constraints are horizontal price-fixing, vertical price-fixing, price discrimination, deceptive pricing, and predatory pricing. Horizontal price-fixing occurs when a group of competing retailers (or other channel members operating at a given level of distribution) establishes a fixed price at which to sell certain brands of products. Vertical price-fixing occurs when a retailer collaborates with the manufacturer or wholesaler to resell an item at an agreed-upon price. This is also often referred to as resale price maintenance or fair trade. Price discrimination occurs when two retailers buy identical amounts of "like grade and quality" merchandise from the same supplier but pay different prices. Deceptive pricing occurs when a misleading price is used to lure customers into the store, and then hidden charges are added, or the item advertised may be unavailable. Predatory pricing exists when a retail chain charges different prices in different geographic areas to eliminate competition in selected geographic areas.

Questions:

1. What makes them ethical and unethical in the below-mentioned scenario? Is this fair for both buyers? Explain.

Some salespeople imposed different prices depending on the intensity of the " buyer-seller" relationship. Discounts are given for those long-time buyers and were able to show loyalty in purchases for the longest time compared to a new buyer.

2. In the below-mentioned scenario, do you think it is legal and unethical or illegal but ethical? Explain.

Rent to own condominium units have a low monthly payment in the first year to attract buyers, but in the second year offsets, all the rebates they gave in the first year. It is no way out for customers since they start paying the units, and normally the company does not allow refunds due to depreciation issues.

3. How does location impact the actual pricing of the product based on geographical origin?

4.What type of pricing constraints does exist in the below-mentioned stores, sellers, and retailers? Identify each, then explain.

- Live sellers on social media, e.g., Facebook.

-Malls, e.g., SM Supermalls, Robinsons Malls

-Variety stores, e.g., Daiso Japan, Japan Home Centre

-Footwear retailers, e.g., Payless ShoeSource