Target Merger Case Study
A fresh example that I can think of would be a purchase of Christmas clearance at Target or other retail stores. Usually a week or so later the items will get marked down to 70% off, a few days after the 70% markdown, everything that is left gets marked down to 90% off.
What does Target want to accomplish with its pricing? Cutting down the cost of products as low as 90% is a pricing strategy that the store is trying to maximize the sales to generate as much revenue as possible, regardless of what it does to a firm’s profits. Maximizing sales is typically a short-term objective since profitability is not considered (Tanner, & Raymond, 2012). Clearance sales not only increase sales but also reduce excess inventory in a store and maximize shelf
What does Target want to accomplish with its pricing? Cutting down the cost of products as low as 90% is a pricing strategy that the store is trying to maximize the sales to generate as much revenue as possible, regardless of what it does to a firm’s profits. Maximizing sales is typically a short-term objective since profitability is not considered (Tanner, & Raymond, 2012). Clearance sales not only increase sales but also reduce excess inventory in a store and maximize shelf