Proposing a Pricing Strategy Framework for Multichannel Retailers

Document Type : Research Paper

Authors

1 Associate Prof., Department of Business Management, Faculty of Management, University of Tehran, Tehran, Iran

2 Ph.D. Candidate, Department of Business Management, Faculty of Management, University of Tehran, Tehran, Iran.

Abstract

Objective
In the past decade, various businesses were launched due to the development of information and communication technologies and the increasing popularity of the internet. Furthermore, traditional retailers were encouraged to launch online channels and become multi-channel retailers to gain a competitive edge. Virtual and online technologies prepared a platform for various organizations and companies to deliver their services and products to their customers. Pricing the same products in different channels is currently one of the most significant factors influencing the competitiveness of retailers and multi-channel companies. Since consumers have different perceptions of prices and respond differently in various sales channels, identifying the influential factors on pricing in multi-channel companies can help pricing managers of companies.
 
Methodology
This study is a systematic literature review analysis. All related research up to 2019, including 203 documents, was gathered. From among them, 86 top ones were selected as the source of analysis. The coding method was used to analyze the gathered data.
 
Findings
After coding the research, duplicate codes were removed, and 49 codes were selected. In the next stage, 49 codes were consolidated into nine concepts, and finally, the codes were grouped into four categories. The categories and concepts include retail characteristics (channel characteristics, company characteristics, after-sales support), usage characteristics (situational and demographic factors), product characteristics (types of goods), and imposing factors (hidden and obvious costs and environmental factors measures).
Conclusion
Any price difference should have a logical reason, and it should be used as a segmentation tool to create value for customers. Although any pricing policy impacts consumers' purchasing intention, the adopted policies should not harm the fairness perception. When setting the pricing strategy, multi-channel retailers should pay special attention to the perception of price fairness and formulate their strategies based on improving consumer perception. The identified categories present some useful suggestions for choosing the optimal pricing strategy in multi-channel retailers. For example, taking into account the characteristics of customer features; since women, married people, and younger people buy more items from online channels, higher pricing of the same products on the online channel than offline is acceptable for the target customers in this category. Regarding product characteristics, customers prefer to test some products such as clothes or perfume before buying, and they prefer to visit the physical store. These kinds of goods can be sold at a higher price in the offline channel than the online channel. Also, based on retailer characteristics, if it is difficult for customers to access physical stores, and the customer prefers to buy from the online store, goods can be offered at a higher price in the online store.

Keywords

Main Subjects

References

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Journal of Business Management
Volume 15, Issue 1
2023
Pages 1-26

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