TIME SERIES ANALYSIS FOR SMALL-MEDIUM ENTERPRISES STRATEGIC PRICING: A CASE STUDY FROM ROMANIAN SMALL CONVENIENCE STORES
TIME SERIES ANALYSIS FOR SMALL-MEDIUM ENTERPRISES STRATEGIC PRICING: A CASE STUDY FROM ROMANIAN SMALL CONVENIENCE STORES

Summary/Abstract: This paper illustrates how time series analysis can support regular price decision making for small convenience grocery stores. The existing literature indicates an increasing importance of strategic pricing. However, small-medium enterprises (SMEs) lack both the know-how and the financial capabilities required for advanced price analysis. The carried research illustrates a relatively simple approach for forecasting the impact of different pricing strategies. A case study based on a Romanian SME: SM, operating in the retail sector, was selected. The collected sales data and financial performance indicators provide an interesting insight into both practices and problems faced by SMEs. Following a detailed investigation, a particular category of products: bread and pastry products, was identified as having a major impact on both sales and gross profit. Based on a series of analyses which include: forecasts, best and worst case scenarios, impacts on revenues and gross profit, SM was recommended to increase their mark-ups with 10% for all bread and pastry products. The change is predicted to produce a 9.86% increase in total gross profit and 1.31% increase in all revenue, with minimum risks and minimal loss of sales.

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