Retail Marketing (BRL-102)

Packaging functions: protection, convenience, branding/identification, information and promotion (shelf impact).

Labelling functions: identifies product/brand, describes contents/size/ingredients, provides usage and safety instructions, and ensures legal compliance (MRP, expiry date, net quantity).

Both improve customer experience and support marketing.

Internal factors: cost of production/distribution, company objectives, marketing strategy, PLC stage, brand positioning.

External factors: demand and elasticity, customer perceived value, competitor prices, government regulation/taxes, economic conditions (inflation, income).

Pricing decisions are made by balancing these internal and external influences.

New product pricing commonly uses skimming or penetration strategy.

1. Price skimming

• Meaning: charge a high initial price and reduce it over time.
• Suitable conditions: unique/innovative product, strong brand, low competition at launch, less price-sensitive customers.
• Advantages: high early profit margins, quick recovery of R&D/launch costs, premium image.
• Limitations: attracts competitors, slow market penetration, may not work in price-sensitive markets.

2. Penetration pricing

• Meaning: charge a low initial price to enter market quickly and gain market share.
• Suitable conditions: large mass market, high price elasticity, economies of scale, intense potential competition.
• Advantages: rapid market share growth, discourages competitors, builds volume and distribution support.
• Limitations: low margins initially, may create low-price image, difficult to raise price later.

Thus, skimming focuses on margin and premium segment, while penetration focuses on volume and market share.