Module 5 case assignment Example | Topics and Well Written Essays - 1000 words

Module 5 case - Assignment Example The new strategies aim at eliminating promotion of products and focuses on selling the recognized brands. The promotion based pricing strategy was initially adopted by the company but latter the company undertook mark-up pricing strategy which made room for promotional discounts. However, the new everyday pricing strategy helped the company to set prices at a lower range and eliminated the need for higher sales price. There are several changes in the pricing structure of the company as the prices no longer ended in decimal number such as $9.99 etc rather whole figures are used for the products. The price tags of the products employed only one price and did not print the retailing price of the manufacturers. This trend of printing the retailing price in the product provided greater comparison pertaining to the amount of product that should be sold. The retailer has made important changes in assorting merchandise (Hess, 2011). The company focused on its mini-stores within larger ones and evaluated that the mini-stores are selling higher than the larger one. The new pricing strategy never gained any attention and thus it is unsuccessful in making any change to the situation. The consumers are not happy with the pricing strategies and the sales of the company declined steadily as time passed. The company encountered a loss of $3.3 billion in the first year of sales of Johnson plan. The amount increased as it approached the second year. The annual revenue of the company in 2011 declined 25% a sharp decline after 1987 (Henricks, 2010). As a result of the decline the CEO announced that the company will not use the everyday pricing strategy anymore and would return to the previous coupons and discounts and would focus on advertised sales (Henricks, 2010; Hill, 2010). 1) Everyday pricing is not correctly executed by the company as it sells many products and does not concentrate on a unique one. Everyday pricing is