4ps of 759 Store

759 Store is one of the famous supermarkets in Hong Kong. Many people love to buy 759 Store’ products because of the lowest prices. Their marketing strategy is “small profits, quick returns” which mean they sell their products at low price in order to increase the stock turnover rate and earn the profit faster. However, some research shows that the price of the local products in 759 Store are much lower than others competitors and some of other retailer shop owners pointed that 759 Store are underpricing their products intentionally in order to eliminate other competitors.

Since 759 Store’ strategy is “small profits, quick returns”, their products’ price have to be lower than the same products in outside market in order to earn profits form each products. Also, customers never complain on the low price of products and they will appreciate that if the shops can reduce the product price further. 759 Store has provided some discounts on different combination of products in order to attract more customers. This strategy provides a quick return on stocks and rapid cash inflow to 759 Store.

Since 759 Store want to extend their market share, they have intention to do the predatory pricing which means to reduce other competitors profits by underpricing, when others competitors can not afford their operating cost and shut down, the price will rise back to original level and the shop can monopolize the whole market. Some research shows that 759 Store’ sales can barely cover the costs of their products which indicate that some of their products’ price are even lower than the cost. They can easily built up the connection of customers and meanwhile they can eliminate the competitors.

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Many small business or retailers have been closed because they can’t afford their operating cost with declining profits. The owner of 759 Store has decided to expand his business in order to earn larger market share. Although underpricing will not violate the law, is it ethical to do so? According to AMA code of ethics in marketing, practicing predatory pricing is unethical. It is an anti-competitive measure to protect market share from new or existing competitors which involves temporarily pricing a product low enough to end a competitive threat. 59 Store should have ensured the fairness of their business and don’t engage in predatory pricing. Also AMA code of ethics have mention the openness of a business which means to create transparency in marketing operations. Many owners of small business have contracted 759 Store about their problematic pricing strategy, but 759 Store still insist in selling their products with low prices. This indicate that 759 Store is lack of communication with others and do not accept the criticism form others. According to 4Ps marketing model, the only ethical issue of 759 Store is pricing. 59 Store represents ethically on other 3Ps. For example, they ensure their products are safe, their products and packages have least impacts on the environment. Also, they do not have any deceptive or misleading advertising or bribery in promotion and there are no gray marketing exist. To improve, 759 Store should deal with their pricing problem. First of all, they should stop practicing predatory pricing and the major reason of them to do so is supplier specifically selling their products to 759 Store at low price.

Since 759 Store have many branch in Hong Kong, they can perform bulk purchases to the suppliers and ask for the discounts which is impossible for others small retailers to do so. Therefore, I suggest that suppliers should have fixed price to sell their products to all retailers and do not offer any discounts. Any other method the stop the problem is that 759 Store stop selling local products and focus on selling Japanese products since most of the customers are buying Japanese products form 759 Store and it can avoid affecting other competitor because the problematic pricing is occurred on local products only.

If 759 Store can focus on selling Japanese products, they probably can gain larger amount of profits because price of Japanese Yen are declining currently which leads to a lower price of imported Japanese goods. Also, 759 Store should communicate more with the suppliers and accept the criticism form others in order to ensure the openness of the business. Reference: Major Ethical Issues in Marketing: 4 Ps Model. (2004). Retrieved from http://www. powershow. om/view/13014e-NmEyN/Table_Major_Ethical_Issues_in_Marketing_4_Ps_Model_powerpoint_ppt_presentation. AMA Code of Ethics. (2003) (pp. ). Retrieved from http://www. helleniccomserve. com/marketingcodeofethics. html. Abandon the local goods fought Japanese food blaze trail(2008). Retrieved from http://stock. appledaily. com/News/Detail? articleId=15777657&issueId=20111107. How about Japanese Yen?. (2012). Retrieved from http://www. 759store. com/video2. php.

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