Price policy and competitive advantage: a multiple case study in the retail industry

Abstract

Considering all marketing mix variables, price is the one that most rapidly affects competition, sales volume, margin and profitability of retail companies. However, there are only a few studies that have tried to understand the price policies actually adopted. This paper presents the results of an exploratory research, based on a literature review, aiming at identifying price policies adopted by expressive national and foreign retail companies: Extra, Makro, Lojas Marisa, Castorama, Saraiva e Siciliano. The most commonly adopted price policy is High Low Price (HILO) due to the fact that the consumer is more sensible to price promotions than to the promise or compromise of everyday low price.