1.1 Introduction
Computerized product price tag management can be defined as any marketing tactic used by firms to create the perception that its current price offers good value compared to competitors’ price, past prices or future prices. Price tag management is intended to create the perception of a low price and increase demand. Many variables are usually involved from the purchasing of the product to marketing it. In addition, the situation of increased price of the product may also reduce demand. Computerization of the store price tag can remove wastage, guarantee quick service at service points of vital importance to the public and improve productivity. Such computerization effort often costs for less than the money and time it will save both the public and the organization. Price changes combined with public education campaigns and other regulations affecting the food environment in institutional and home settings may have a multiplicative effect that could significantly improve diets, particularly among at-risk population groups.
As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Limitations of the Study and Definition of technical terms.
1.2 Background of Study
In today's business environment, even many smaller businesses have come to rely on automated price tag inventory management systems. Certainly, there are plenty of small retail outlets, manufacturers, and other businesses that still rely on manual means of inventory tracking. Indeed, for some businesses such as convenience stores, shoe stores, or nurseries the purchase of an electronic inventory tracking system might constitute a wasteful use of financial resources. The phenomenon of price adjustment is central in economics for several reasons. Firstly, at the microeconomic level, since price adjustment is considered the main market clearing mechanism, whether prices adjust or not can have important implications for the efficiency of resulting allocations. Therefore, having a better understanding of the price change process can provide insights on issues like: how rigid are prices of individual products; how fast are costs passed-through onto prices; how long it takes prices to adjust to changes in market conditions such as changes in supply and demand, etc. Second, at the managerial level of an individual business, pricing and price adjustment play a critical role as it determines the bottom line profitability. Third, there are variety of markets (e.g. different types of auction markets, non-auction markets such as markets with posted prices, etc.), and understanding the specific characteristics of these institutions may help us better understand and predict the outcomes observed at these markets. Given the importance of the price adjustment mechanism, it is not surprising that the issue has received considerable theoretical as well as empirical attention.
A detailed understanding of the costs associated with all aspects of the price change process can be valuable for managers. A decision to change a price of a product, like any other economic decision, has costs and benefits. In the area of pricing strategy, managers have developed an extensive understanding of the benefits associated with adjusting prices to changing market conditions.
A common strategy among retailers is to offer consumers a price guarantee. There are two widely used versions: price matching policies and best price policies. A price matching policy guarantees that prices will be no higher than the prices charged by other retailers. A typical price matching policy guarantees the consumer a rebate equal to the price (and perhaps more) if the consumer finds the same product offered at lower price by a competing firm within 30 days of purchase. Price tag management is relevant based on the following reasons: Many customers have poor price knowledge. Price tags are effective at increasing demand, Price tags are more effective (and actual price changes are less effective) when customers have poor price knowledge, Price tags are most effective on newly introduced items and with newly acquired customers. Price tags are less effective when used more often. It is profitable for firms to place price cues on items for which prices are low. Price tags may lower demand if used incorrectly. The manual way of computing price tags is not effective. Hence there is need for an automated system that will significantly aid retailers to compute and update price tags.
The challenges encountered that led to the execution of the research work is that, many retailers do not have an effective method of managing price tags such that they maximize profit. When customers lack perfect information about prices they may also have imperfect knowledge of quality. Price tag management is intended to create the perception of a low price and increase demand. Many variables are usually involved from the purchasing of the product to marketing it and many business persons that are not conversant with how to set a price tag may end up running at a loss. In addition, the situation of increased price of the product may also reduce demand. There is therefore need for an effective software system that can aid in the determination of optimal price such that there is no loss or excess profit and also to provide room for updating price tag of items when needed.
1.3 Statement of Problem
Investigation revealed the problems of the existing Price Tag Management System which entails that:
- A lot of retailers do not have an effective method of managing price tags such that they maximize profit.
- Customers lack perfect information about prices they may also have imperfect knowledge of quality.
- Many business persons that are not conversant with how to set a price tag may end up running at a loss.
There is therefore need for an effective software system that can aid in the determination of optimal price such that there is no loss or excess profit and also to provide room for updating price tag of items when needed.
1.4 Aim and Objectives of the Study
The aim of the study is to design and implement a Computerized Product Price Tag Management System. In achieving this aim, the following specific objectives were laid out as follows to develop an application software that will:
- Aid in the determination of prices of products based on cost variables.
- Allow the easy updating of price tags
- Replace the manual way of giving price tag to products
- Hold a database of price tags such that the price of any product can be queried easily.
1.5 Significance of Study
The significance of the study is that it will provide a possible solution to the problem of determining the price tag of products and it will also serve as a decision support system and also as an information system to managers of supermarket.
This study will be of immense benefit to other researchers who intend to know more on this study and can also be used by non-researchers to build more on their research work. This study contributes to knowledge and could serve as a guide for other study.
1.6 Scope of Study
The scope of the research is focused on the Design and Implementation of a Computerized Product Price Tag Management System using Happy Day Supermarket, Oron as a case study.
1.7 Limitations of the Study
During the course of this study, many things militated against its completion, some of which are:
- Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
- Establishment Policies: Establishment policies posed a serious limitation as most staffs are not ready to release information needed for this project work. There were lots of information needed from the staffs of this institution to enhance the study which took them time to release or they did not release at all for security purposes, hence the scope was reduced.
- Research material: availability of research material is a major setback to the scope of the study.
- Frequent power failure: This made the researcher append more money on fuel to ensure sustainable power.
- Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet).
1.8 Definition of Terms
Price Tag: Label saying what something costs also a small label attached to an item that is for sale, with the price written or printed on it.
Price: The amount, usually of money, that is offered or asked for when something is bought or sold.
Registration: This means to keep records received from the management for reference purposes.
Management: It is the co-ordination of all the resources of an Organization through the process of planning, Organization, directing and controlling
System: Physical component of a computer that is used to perform certain task.
Data: Numbers, Text or image which is in the form suitable for Storage in or processing by a computer, or incomplete information.
Information: A meaning full material derived from computer data by organizing it and interpreting it in a specified way.
