Question

What are the pros and cons of everyday low pricing to a retailer and to a manufacturer?

ANSWER THE FOLLOWING QUESTION NOT LESS THAN 100 WORDS

Answer 1

Everyday Low Pricing is a pricing strategy that has been a remarkable success for some manufacturers/retailers and a disaster for others.

Everyday Low Pricing is a low-price strategy designed to enhance the competitive position of the supplier based on the following basic premises:

• A consistent, competitive price will lead to an even demand for products
• Inventory and other logistical costs will drop because of better management of product flows.
• Promotional costs and other forms of trade spending will be reduced.
• The cost advantages of steady demand and better inventory management will lead to even lower prices.

One of the advantages of Everyday Low pricing is that it often leads to more consistent or predictable demand. Suppliers or retailers are able to more effectively control and forecast production, inventory costs, and shipping costs thus stabilizing demand

Since periodic deals are replaced by a single, no-deal low price, there is no advantage to customers to postpone a purchase.

Successful Everyday Low pricing strategies tend to generate large volume sales that allow companies to cut costs and pass these savings along to customers.

At the same time, retailers or manufacturers are able to leverage their own buying power to reduce their purchase price. These savings, as well, are then passed along to customers.