Defining the links between retail price strategies and price tactics

Retailers tend to become trapped in a price-promotion war where price issues are dealt with on a short-term basis, indicating almost solely tactical choices. Since price is the only part of the marketing mix providing direct revenues to the organisation, it should also be of strategic importance for the retailer. Not only in practice are price tactics often separated from pricing strategies, it is also the case in research where these are often studied in isolation from each other probably due to their individual complexity. This paper contributes to both the research area and practice by discussing these two complex areas together, and the essence of both strategy and tactics are defined. By considering the planning horizon for the retailer this paper further contributes by defining the links between price strategy and price tactic. The conclusion shows the importance of clearly establishing which analytical level is being analysed.