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EDLP versus Hi-Lo Pricing Strategies in Retailing

Literature Review and Empirical Examinations in the German Retail Market

by Sabine El Husseini (Author)
©2014 Thesis XXI, 127 Pages

Summary

Retail pricing strategy is seen as one of the priorities in retail management. There exist two main pricing strategies in retailing: the Every Day Low Price (EDLP) strategy and the High-Low (Hi-Lo) pricing strategy. Despite the importance of this topic, it has been given little attention in academic research. The author fills this gap in academic literature and examines the topic both from a theoretical and an empirical perspective. Based on a comprehensive conceptual examination of pricing strategies in retailing, the author conducted two large-scale empirical studies about the impact of the retailer’s pricing strategy and the price promotion activity on store performance and derives fruitful implications both for future research and for managerial action.

Table Of Contents

  • Cover
  • Title Page
  • Copyright
  • About the Author
  • About the Book
  • This eBook can be cited
  • Geleitwort des Herausgebers
  • Preface
  • Table of contents
  • List of Abbreviations
  • List of Symbols
  • List of Figures
  • List of Tables
  • 1 Introduction
  • 1.1 Problem background
  • 1.2 Research questions and outline
  • 2 Pricing Strategy in Retailing – A literature review
  • 2.1 Introduction
  • 2.1.1 Problem background and relevance of subject
  • 2.1.2 Goals and structure of the paper
  • 2.2 Theoretical foundations of the pricing strategy in retailing
  • 2.3 Definition of the pricing strategy in retailing
  • 2.4 Review of the research on pricing strategy in retailing
  • 2.4.1 Results of conceptual papers
  • 2.4.2 Results of empirical papers
  • 2.4.2.1 Determinants of pricing strategy in retailing
  • 2.4.2.1.1 Market and consumer factors
  • Main results
  • Further results
  • 2.4.2.1.2 Retailer factors
  • Main results
  • Further results
  • 2.4.2.1.3 Competitor factors
  • 2.4.2.1.4 Manufacturer and brand factors
  • 2.4.2.2 Research on the outcomes of pricing strategy in retailing
  • 2.4.2.2.1 Retailer outcomes
  • 2.4.2.2.2 Customer outcomes
  • 2.5 Implications
  • 2.5.1 Directions for future research
  • 2.5.2 Managerial implications
  • 2.6 Conclusion
  • 3 Don’t get Stuck in the Middle! An Examination of Pure versus Hybrid Pricing Strategies in Retailing
  • 3.1 Introduction
  • 3.2 Conceptual framework and hypotheses
  • 3.2.1 Qualitative pre-study
  • 3.2.2 Developing the focal construct: comparing literature and field perspectives
  • 3.2.3 The effects of pricing strategy alignement
  • 3.2.4 Moderating effects
  • 3.2.4.1 Market factors
  • 3.2.4.2 Store factors
  • 3.2.4.3 Competitive factors
  • 3.3 Method
  • 3.3.1 Empirical context and data
  • 3.3.2 Measures
  • 3.3.2.1 Focal construct: pricing strategy alignment
  • 3.3.2.2 Performance variables
  • 3.3.2.3 Moderating variables
  • 3.4 Results
  • 3.4.1 Analysis approach
  • 3.4.2 Additional analysis
  • 3.5 Discussion of results
  • 3.5.1 Theoretical implications
  • 3.5.2 Managerial implications
  • 3.5.3 Limitations and need for further research
  • 4 Price Promotion Activity at the Category Level: Less is More?
  • 4.1 Introduction
  • 4.2 Method
  • 4.2.1 Data
  • 4.2.2 Measures
  • 4.2.2.1 Price promotion activity
  • 4.2.2.2 Productivity of the sales area
  • 4.3 Analysis
  • 4.4 Results
  • 4.4.1 Recommendation: No price promotion activity
  • Chocolate/Cereal bars
  • Auto dish
  • 4.4.2 Recommendation: High price promotion activity
  • Brandy/Cognac
  • Heavy Duty Detergents
  • Shower gel
  • Shampoo
  • 4.4.3 Recommendation: Low price promotion activity
  • Margarine
  • Cream cheese
  • Chocolate
  • Juices
  • Roasted coffee
  • Yoghurt
  • Pralines
  • Dog food
  • Ham and sausage
  • Soups and stews
  • Salty snacks
  • Air freshener
  • Rice
  • 4.4.4 Recommendation: Medium price promotion activity
  • Bathroom tissue
  • Soft drinks
  • Total hand & body care
  • Toothpaste
  • Ketchup
  • Spirituous beverages
  • Fruit gums
  • Cereals
  • Liquors
  • Instant/convenience food
  • Sparkling wine/champaign
  • Sweet spread
  • Frozen pizza
  • Deodorants
  • 4.4.5 Recommendation: Low or high price promotion activity
  • 4.4.6 Summary of recommendations
  • 4.5 Discussion
  • 5 Conclusion
  • Appendix
  • Expert Interview Guidelines
  • References

List of Abbreviations

AIC

Akaike's Information Criterion

ANOVA

Analysis of Variance

BIC

Bayesian Information Criterion

BP

Buying Power

C

Customer’s perspective

CEO

Chief Executive Officer

cf.

Confer (compare)

Comp

Competitive Intensity

Disc

Discounter (vs. Non-Discounter)

Dr.

Doktor

Dr. rer. pol.

Doctor rerum politicarum

EDFP+

Every Day Fair Price Plus

EDLP

Every Day Low Price

EDLPP

Every Day Low Purchase Price

Eds

Editors

e.g.

Exempli gratia (for example)

etc.

Et cetera (and so on)

G

Gramm

GfK

Gesellschaft für Konsumforschung

Hi-Lo

High-Low (Pricing Strategy)

HLM

Hierarchical Linear Modeling

HLP

High-Low Pricing

i.e.

Id est (for example)

JBR

Journal of Business Research

JM

Journal of Marketing

JPBM

Journal of Product and Brand Management

JR

Journal of Retailing

JRCS

Journal of Retailing and Consumer Services

← XV | XVI →

M

Mean

MANOVA

Multivariate Analysis of Variance

MS

Marketing Science

p.

Page

PD

Population Density

PPA

Price Promotion Activity

Prof.

Professor

PROMO

Promotional Pricing Strategy

PSA

Pricing Strategy Alignment

QME

Quantitative Marketing and Economics

R

Retailer’s perspective

SD

Standard Deviation

SDSQM

Sales Dollars per Squaremeter

SEM

Structural Equations Modeling

SKU

Stock Keeping Unit

SVSQM

Sales Volume per Squaremeter

Details

Pages
XXI, 127
Year
2014
ISBN (PDF)
9783653034509
ISBN (ePUB)
9783653995749
ISBN (MOBI)
9783653995732
ISBN (Hardcover)
9783631643570
DOI
10.3726/978-3-653-03450-9
Language
English
Publication date
2014 (April)
Keywords
Price Promotion Activity EDLP Hi-Lo hybrid pricing strategies Preispolitik store level
Published
Frankfurt am Main, Berlin, Bern, Bruxelles, New York, Oxford, Wien, 2014. 150 S.

Biographical notes

Sabine El Husseini (Author)

Sabine El Husseini, Dr., studied Business Economics at the University of Augsburg (Germany) and the University of California, Santa Barbara (USA). She worked as a research assistant at the Otto Beisheim Endowed Chair of Marketing and Commerce at WHU – Otto Beisheim School of Management, Vallendar (Germany). Her research topics include pricing strategy and retail marketing.

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Title: EDLP versus Hi-Lo Pricing Strategies in Retailing
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152 pages