ABSTRACT
This chapter discusses a number of important concepts and aims to apply them specifically to retail, such as pricing strategy, pricing, pricing through global surcharge calculation, deviations from the global surcharge calculation, price image and adjustment of the price image. Economic theory suggests that the optimal price for the supplier in terms of profit maximisation lies there where marginal costs equals marginal revenue. Uniform surcharge calculation may lead to a pricing for certain products that is higher than that of the same products with the competition. Basically, global surcharge calculation leads to all stores of a retail company using the same pricing. This certainly applies to a relatively small country like the Netherlands, where regional demand differences are limited and the distances are not so big that they result in very different distribution costs per region. The general pricing of the product range is determined from the selection by the used surcharge factor and the purchase price.
