Topics: Hong Kong, Pricing, Customer Pages: 4 (1025 words) Published: April 28, 2013
Watson - Due to the bulk purchase of products by centralized sourcing with AS Watsons Group and purchasing process, it can lower the cost and apply medium to low price strategy. Mannings - Take competitive advantage of mother company “Dairy Farm International Holdings Limited” with low price bargain power. Moreover, there is a price differentiation in different district. The pricing method is to comparing with the price within the district in order to reach the lowest price of some selected products. So the price of some shops may be a bit difference to that in other district. For example, some product in Sham Shui Po is cheaper than in Central. Ten years ago, it happened a price war between Watsons and Mannings. Someone found that product in Mannings was much cheaper than Watson for 20% after Watsons claimed they had launched “The Guaranted Lowest Price” and “Double-the-difference” refund policy. A norm “ Mannings is cheap” start from this time and continuous until now.

Today, the price of product is the same between Watsons and Mannings generally. But Mannings can even mark down the list price a little bit by using “Sales at the expense of Profits” strategy. The reason is : 1) they can bargain a deeper bulk purchase discount as they have more stores in HK. The turnover is more than Watsons. 2) The Location of Watsons’ store concentrate in high rental rate district, their cost cannot be decrease any more.

Watsons Your Personal Store carries more than 1,000 brands ranging from medicines, health supplements, skin care, toiletries, cosmetics to small electrical products such as Electronic Blood Pressure Monitor. By the way, Watsons also carry their Own brand products which include Men’s & Women’s skin care products and personal care like skincare, Hair care & Sun care.

In the tangible product, Watsons and Mannings are similar that they also carry their own brand. Also, both of them are the sole distributor in certain Brand. E.g Mannings,...
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