CHOOSING PRICE LEVELS TO INCREASE SALES 33
requires. In determining our prices we have the biggest
lever in determining our profits.
If the price is right, there comes direct saving in publicity
and sales effort all along the line. For a rightly set price has
innate virtues that do not have to be extravagantly “pushed”
to be recognized.
If the prices are set at wrong levels, not only may we be
misled but also the whole Model Stock Plan may be prevented
from functioning in the most profitable way. Aside from the
effect on customers of offering less attractive values, since
under the Model Stock Plan selling price determines what we
shall or can buy, if we have a price that is 10 per cent too
high, we lose the valuable stimulus of having to work hard
to get into our three price levels goods that, as yet, are just
beyond the reach of our fixed prices and so beyond the maxi-
mum mass-purchasing price of very important numbers of
possible customers.
The prices of full lines need to be reviewed every season.
Any one of several sets of conditions may alter them. No
set of prices should be carried over to a new season unless we
can prove that more merchandise is being sold, and should
be sold, at those prices than at prices a little higher or lower.
There are, however, only two basic reasons for changing
Properly set full-line prices:
I. A radical change in the purchasing power of the
community that we serve.
2. An important change in the value of the money with
which it buys.
Changes in the value of the commodity itself can be met
by giving a better or less value for the same price.
Of the fixed-price-level merchandisers, Woolworth’s is
Certainly the most conspicuously successful. It is worth
remembering that Woolworth’s stores held firmly to their
five- and ten-cent prices throughout the war and the post-
war inflation.
Unquestionably it is to the advantage of a business that the
full-line prices remain unaltered from year to year. A
business may thereby acquire a ‘trade-mark’ value on its
