Retail Pricing Strategies in Recession Economies: The Case of Taiwan

Abstract

In a recession economy, consumers tend to be more sensitive about price, and firms have difficulty obtaining necessary resources for effective pricing. However, previous studies into pricing appear to overlook the possible effect of economic environment on the effectiveness of a pricing strategy. By observing the current recession and the resultant price war in Asian countries, the authors examine marketing decisions by retailers in a recession economy. The authors propose a contingent model, based on organizational resources and consumer price consciousness, to guide the examination of the strategy–performance bond. The results show that only resource-abundant retailers are able to use strategies proposed in this study to thrive in a recession. A value-centric strategy outperforms all other approaches.