Extensive market research in the home
improvement industry has determined 8
levels of price sensitivity. We have coded
every item in our inventory with a number
1 through 8.
Approximately 10 percent of SKUs in your
inventory are code 1's and 2's. Pay close
attention to where your competition is
priced on these items as it can make or
break your business.
Orgill's MSP pricing strategy provides a
system that can adjust a retailer's prices
to match any competitive situation, and
any desired price position, based on the
local market conditions.
The chart to the right demonstrates the effect of the MSP strategy.
Market Specific Pricing establishes a
retail price-positioning plan customized
for your store, based on your local market
conditions.
MSP utilizes retail sensitivity codes to
comprehensively and systematically
manage your retail pricing. This
methodical approach enhances price
image and maximizes gross margin
dollars.
To begin the MSP process, a research
team will conduct a complete price audit
from your retail operation, covering a
sampling of products from all core
hardware departments over all eight
levels of price sensitivity.
After the research has been gathered,
this pricing information is then entered
into a pricing template. Through this
template, you are able to determine
where your store is positioned compared
to other similar retailers in your market,
while considering all eight sensitivity
levels.
Once the data has been applied, you will
be able to create a retail price positioning
plan by making a price decision for each
sensitivity code.