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EDLP versus Hi-Lo Pricing Strategies in Retailing

Literature Review and Empirical Examinations in the German Retail Market

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Sabine El Husseini

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.
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5 Conclusion

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5 Conclusion

The starting point of this dissertation was the fact that the topic of pricing strategy is one of the top priorities in retail management. Both prior research and the retailing practice gave support for the importance of pricing strategies in retailing: on the one hand, retailing researchers claimed to conduct more research about pricing strategies in retailing – both conceptually and empirically. More concrete, prior research claimed to provide a more detailed understanding of pricing strategy in retailing in terms of definitions, measurement, relevant determinants and retailer specific outcomes. On the other hand, retailing managers that we interviewed in our qualitative pre-study confirmed the importance of this topic in the retailing practice. Despite this importance, until now this topic has been given relatively little attention in the academic research. Therefore, the aim of this work was to provide a better understanding of pricing strategies in retailing both from a theoretical and an empirical perspective. We believe, our work makes three central contributions:

First, it provides a comprehensive examination of the existing literature on pricing strategy in retailing in chapter 2, based on an article of Fassnacht/El Husseini (2012) which has been accepted for publication in the “ZfB -Zeitschrift für Betriebswirtschaft”. In this chapter, we examined the existing literature about pricing strategy in retailing with regard to definitions, relevant determinants and outcomes. In total, six conceptual and 21 empirical papers on pricing strategy in retailing were analyzed. Based on the theoretical and conceptual foundations of...

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