The Effect of Price Policy on Market Share for Retail Stores in Jordan

Abstract

A retailer's success depends largely on how well it manages the process of pricing its products. Pricing decisions, however, are often subject to large uncertainties. The impact of a pricing strategy on retailers is difficult to assess because of the interdependence of customer and store behavior. It becomes even more complex when competitors' pricing strategies can influence customers' purchasing decisions. The impact of retail pricing strategies on market share in Jordan is the focus of this research project. Out of 500 self-administered questionnaires distributed to retailers, only 342 were valid for analysis. In addition, the data was analyzed using Partial Least Square Structural Equation AL Modeling (PLS-SEM) to test the research objective of this study. The results of the study indicate that all three types of pricing policies (price evaluation (both fixed and variable policies), competitive pricing (three different approaches: low, medium and high) and structured assortment pricing (uniform pricing policy, brand level pricing policy and product level pricing policy) have a significant impact on market share in Jordan. This study adds to the literature by providing a new perspective on the impact of different pricing strategies on retail store market share.