The model stock plan

Bibliographic data

Monograph

Identifikator:: 1820833348

URN:: urn:nbn:de:zbw-retromon-210730

Document type:: Monograph

Author:: Filene, Edward A. http://d-nb.info/gnd/123562244

Title:: The model stock plan

Place of publication:: New York

Publisher:: McGraw-Hill Book Company

Year of publication:: 1930

Scope:: xiv, 253 Seiten

Digitisation:: 2022

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

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Document type:: Monograph

Structure type:: Chapter

Title:: Chapter II. Choosing price levels to increase sales

Collection:: Economics Books

CHOOSING PRICE LEVELS TO INCREASE SALES 27 The answer to this is that we could not do business in bulk at four full-line prices without adding another class of customers. To follow through with the illustration of women’s hats: if we wish to do business in bulk with cus- tomers for whom $3 is the usual price they can afford to pay for a hat, we must add for them a more inexpensive hat at $2 or at $1.50. Experience has shown that no retailer in a large com- munity can cater to too broad a section of the economic scale, because people of such widely different income levels will not trade in large numbers at the same store. Either the additional line will fail to sell in sufficient quantities to make it profitable as a fourth full line, or—what is more probable—the demand at $15 will fall off and $3, $5, and $10 will become the three full-line prices instead of $s, $10, and $15; in other words, there will be a definite shifting to a lower-priced class of trade. _ If $20 were the added fourth full-line price, the likelihood is still greater that the fourth full line will fail, because it is much easier to trade down than to trade up. A merchandise executive who had followed the three-full- line plan without absorbing its basic principles once told me that he thought “best-selling full line” a misnomer, men- tioning a department in which the largest sales volume was in the cheapest full line, and the so-called “best-selling full line” was actually second best. From the very definition of the best-selling full line, it cannot be overshadowed in sales volume by another price line unless some factor has been given a wrong value. In the department in question either the line prices were incorrectly established—probably the buyer was trying to trade too high and should make his Present cheapest full line his best-selling full line, with a new cheapest full line below it—or his stock in the best-selling full line was so weak that the store’s possible customers were buying best-selling full-line merchandise of his competitors. The starting point for buying a line of merchandise scientifically—and the backbone of the Model Stock Plan— 1s determining the prices at which, at a given time, the

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