Question

Do you think the chain should charge higher prices at its inner-city stores? Why or why not? If prices were increased and antipoverty activists got TV coverage by picketing the chain, how would you respond to a TV reporter covering the story. ( my subject isn survery of marketing)

Answer 1

Chain should not charge higher price at inner city stores, because consumers present in inner-city area have lower purchasing power, lower income and may have different social and economic issues. Hence, higher price put up at these stores, will bring poor reputation to the store and do alienation of stores among the customers in this area. Hence, it is wise to keep competitive pricing at inner-city stores.

The response will be centered upon high cost of operations, less number of sales at these stores and higher logistics and delivery cost as well. It has forced the chain to increase the price at these stores. Though, the store is also planning to offer discounts for bulk purchases made by people. So, net price will remain same, they were paying in the past, but they have to pay in bulk. Besides, stores also keep job to few people of these areas and it incurs cost, despite sales is not increasing. Hence, Price is increased to continue the services in this area.