Wednesday, June 3, 2009
♥ Price Strategy
Armani Exchange generally is perceived as an expensive brand. This is portrayed due to the nature of its pricing. It follows a general Hi- Lo pricing. The initial price would be set at a heavy mark up. Then they hold sales at various parts of the year in order to build up the excitement of the customers. Profits are still maintained despite the reduction in price. Hence, this greatly benefits the retailer. The method of pricing is very much cost-oriented. This means that upon completion of the products in their factories, they total up the costs and from there calculate an appropriate mark up percentage.
As Armani is selling its brand name, people who are loyal to the brand will buy albeit high prices. The pricing has plenty of physiological effect as well since it entices customers into believing that the high prices represent quality. The company seeks to enhance customer loyalty through discounts, memberships and rebates which effectively makes the customer feel important and will hence be more and more immune to the pricing.
As Armani is selling its brand name, people who are loyal to the brand will buy albeit high prices. The pricing has plenty of physiological effect as well since it entices customers into believing that the high prices represent quality. The company seeks to enhance customer loyalty through discounts, memberships and rebates which effectively makes the customer feel important and will hence be more and more immune to the pricing.
9:53 AM
