Pricing

Pricing is about how the retailer distributes value to the customer. The pricing policy is a
series of principles by which a company such as MUJI to decide how to manage the price of its
goods (Caelli 2015). There's a variety of quality products which sets as low prices. As we know,
the consumer of MUJI mostly are the middle-class young people. MUJI positioned as low
pricing which offers quality product produced by simplifying the production process in Japan.
Conversely, MUJI executes different pricing in different area including Malaysia. Premium
pricing strategy is applied due to MUJI make their product looks premium such as the unique
design and perceive value while comparing with competitor’s brand (Ying Wei 2009). In
addition, the taxes and tariff that make the MUJI price looks more expensive. The customer
thinks that the product is more praiseworthy than similar offering in premium pricing. This
pricing strategy is usually above the value of market standard, but the purpose is to offerings
create a market perception that leads to further income (Price Intelligence 2015).

Valued-based pricing had applied to MUJI which the price is set based on the customer’s
perceived value regardless of cost value-based prices products and services profitably at what
they are worth to the customer cost-based pricing. Customers understand the value of choosing
MUJI. The quality standard of MUJI’s product had won people’s hearts that leads more customer
are willing to pay for their products in terms of quality. Despite MUJI is having a high price
strategy, the customer retention of MUJI is good and they still achieve a high level of customer
loyalty for repeat business and referrals. This benefit tends to also derive from the nature of the
sales relationship, which needs to be both close and trusting before value-based pricing can even
be contemplated. In addition, this way results in the highest possible price that MUJI can charge,
and maximizes revenue (Bragg 2018).

The even pricing is applied which under the psychological pricing strategy to MUJI. The
price for MUJI ended with 0.90 (Appendix 1). This is because the impact is based on the natural
and rational thinking process that typical customers follow when shopping. MUJI believe that
certain prices or price ranges will appeal to attract buyers. The fact of placing 0 as the ending of
the price has become the motivation of people or the final perception of the product or even the
intention to purchase. Moreover, consumer behavior has shown that there’s a psychology effect
on the consumer’s mind. Besides, the effect of having psychology pricing can increase the sales
volume of MUJI (Price Intelligence 2015).

MUJI has the frequent shopper program which is MUJI reward program (Appendix 2). It
defines as the reward for the customer through their multiple transactions, collect exclusive perks
such as point entitling them to reduced prices and free items (Collins 2019). MUJI Rewards is a
cardless rewards program launch to reward shoppers on their purchases with MUJI. This
program is becoming popular in retailing even the retailer seem unsure whether they will lead to
higher loyalty or higher revenues. By the way, there's terms and condition when joining as a
member of MUJI. This program is to encourage the customer to have a repeat purchase behavior
and retailer loyalty.

References

Caelli, M 2015, Pricing Policy for business, viewed 24 July 2019,

<https://www.skillmaker.edu.au/pricing-policy-for-business/>.

Ying Wei 2009, Muji: On Strategic Marketing, viewed 24 July 2019,

<https://yingweitan.wordpress.com/2009/07/23/muji-on-strategic-marketing/>.

Price Intelligence 2015, Deeper Insights Into the Premium Pricing Strategy, viewed 24 July
2019,

<https://www.priceintelligently.com/premium-pricing>.

Bragg, S 2018, Valued based pricing, viewed 24 July 2019, <

https://www.accountingtools.com/articles/2017/5/16/value-based-pricing >.

Price Intelligence 2015, Deeper Insights Into Odd-Even Pricing, viewed 24 July 2019, <
https://www.priceintelligently.com/odd-even-pricing>.

Collins 2019, Definition of 'frequent shopper program, viewed 24 July 2019, <
https://www.collinsdictionary.com/dictionary/english/frequent-shopper-program>.
Appendix

Appendix 1: even pricing strategy

Appendix 2: MUJI reward program