Discuss the pricing strategies used by retailers to attract consumers

Prices reflect a retailer's marketing objectives and policies. They also play a major role in consumer perceptions of a retailer.
Markup: Markup is the amount a retailer adds to a product's cost to set the final selling price of the product. The amount of the markup typically results from two marketing decisions:
1 ) Services performed by the retailer. Other things being equal, stores that offer more services charge larger markups to cover their costs.
2 ) Inventory turnover rate. Other things being equal, stores with a higher turnover rate can cover their costs and earn a profit while charging a smaller markup.
A retailer's markup exerts an important influence on its image among present and potential customers. In addition, the markup affects the retailer's ability to attract shoppers. An excessive markup may drive away customers; an inadequate markup may not generate sufficient revenue to cover costs and return a profit.
Markdown: Marketers determine the markups based partly on their judgements of the amounts that consumers will pay for a given product. When buyers refuse to pay a product's stated price, however, or when improvements in other items or fashion changes reduce the appeal of current merchandise, a retailer must take a markdown. Markdown is the amount by which a retailer reduces the original selling price of the product.