Retail Pricing Strategies in Recession Economies: The Case of Taiwan

Abstract

In a recession economy, consumers tend to be more sensitive about price, and firms have difficulty obtaining necessary resources for effective pricing. However, previous studies into pricing appear to overlook the possible effect of economic environment on the effectiveness of a pricing strategy. By observing the current recession and the resultant price war in Asian countries, the authors examine marketing decisions by retailers in a recession economy. The authors propose a contingent model, based on organizational resources and consumer price consciousness, to guide the examination of the strategy–performance bond. The results show that only resource-abundant retailers are able to use strategies proposed in this study to thrive in a recession. A value-centric strategy outperforms all other approaches.

New Pricing Strategy under Deflation: Case Study of a Japanese Company

“…These newer studies agree with traditional brand management beliefs: Preferences for a certain brand are easily damaged or forgotten after price promotion (Guadagni & Little, 1983;Scott & Yalch, 1980). In a study on sustainable pricing strategies, Chou and Chen (2004) urged companies to consider both internal and external influences.…”

The pricing strategies of Hungarian food retail chains during the last recession

“…Table 8 summarises the results discussed above. Surprisingly, the most successful strategy (aggressive pricing) is very similar to the predatory pricing strategy found by Chou -Chen (2004), according to whom net profit decreased in Taiwan. Even more interesting is that the consequences of these strategies are quite similar in Taiwan and in Hungary.…”

“…His results show that pricing changed considerably. Chou -Chen (2004) analysed the success of pricing strategies during recession in Taiwan. Their analysis partially supported the hypothesis that for retail companies with abundant resources operating in a market where consumers are price sensitive, a predatory pricing strategy leads to higher market performance.…”

“…In addition, this is the most general pricing strategy, as 61% of the stores pursue it. It is interesting that Chou -Chen (2004) found a similar pricing strategy in Taiwan in a recession environment (they called it predatory pricing).…”

Estrategias de marketing utilizadas por las empresas chilenas para incrementar el valor de los clientes

“…Constantemente los investigadores han analizado cuáles deberían ser las mejores estrategias de marketing que deben realizar las empresas (Chou & Chen, 2004, Hogan, Lemon y Libai, 2004, Hollander, Keep y Dickinson, 1999, Oliver, 1999. Por ejemplo, Shugan (2005) cuestiona la forma de una proporción importante de los actuales programas de lealtad llevados a cabo por las empresas, cuestionando que estos programas han sido orientados a generar obligaciones con los consumidores, pidiéndoles que confíen en la empresa y no a la inversa como debería ser, es decir, la empresa mostrando confianza por comprometerse con el consumidor.…”