The pricing strategies of chemist warehouse

Pricing strategy is a method for company to gain some profit from customers. Pricing is a considerable part in market, it is because price will effect customers’ decision for buying stuffs. According to Christian, Dirk and Melanie (2014) shows that customer have to dealing with complicated price plan, and usually need to consider the price and calculate discount. Therefore, there are lot of company use price strategies to figure out a fair price to find out the range where will make customer willing to pay.

There are seven types of pricing strategies:

  1. Penetration pricing
  2. Optional pricing
  3. Premium pricing
  4. Competition pricing
  5. Value pricing
  6. Bundle pricing
  7. Skimming pricing

Through this 7 types of ways, company can make business plan and decide a fair price then put on the market to find out which is suitable for their company or the market. Each method can earn different profit and different value, and also can see the market condition and demand. In addition, price elasticity and price sensitivity also will influence the market condition and the business plan decision.

There is a company use competition pricing to engage shops in Australia. The company is “chemist warehouse”. This pharmacy which advocate that is the cheapest chemist in Australia. In addition, chemist warehouse claim that have 50% discount prescription, and also beat everyday price. They use discount to lower the price to attract customer, the price usually cheaper than other pharmacy or supermarket.

There is a video which is briefly introduce the chemist warehouse:

“Our House” 2014 Chemist Warehouse TV Ad (45s)

Chemist warehouse usually promote different discount plan for customer. For instance, sometimes half price for cosmetics or within Christmas holiday, they will release business plan and promote really nice price for customer, and will make customer willing to buy stuff from chemist warehouse.

There are two advertisements shows that promotion plan:

“Half Price Cosmetics at Chemist Warehouse”

“Chemist Warehouse Christmas Catalogue Sale”


According to those introduction for the cheapest chemist can find out the chemist warehouse use many different kinds of promote plan to operate shops, such as discount or festival discount…etc. From the video can see they sell many types of products, such as perfume, cosmetics, medicine and daily life stuff. Therefore, it is a wonderful choice for customer go to purchase, and also beneficial for customer.

All of above, can briefly learn and understand some information about pricing considerations and approaches, thus price is a central that can evaluate the demand between market and customer, which area is suitable for customer and will make them willing to pay. Therefore, price strategy is important for company to make plan and figure out what way can earn huge profit.

As a result, there are 7 strategies which include penetration pricing, optional pricing, premium pricing, competition pricing, value pricing, bundle pricing, skimming pricing. These are some useful and common way for businessman to make decisions about price and view today’s market situation. Moreover, it can help them find out better way to run a shop and a company.

By- 214497061

Reference list:

Chemist warehouse official website: <>

Homburg, C, Totzek, D, & Krämer, M 2014, ‘How price complexity takes its toll: The neglected role of a simplicity bias and fairness in price evaluations’, Journal of Business Research, vol. 67, pp. 1114-1122. , retrieved 1 May 2016.


“Our House” 2014 Chemist Warehouse TV Ad (45s)


Half Price Cosmetics at Chemist Warehouse


Chemist Warehouse Christmas Catalogue Sale






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