I need help writing a peer response

Orginal Question: Research

Research pricing as it applies to your offering and industry. Consider your options for pricing. Consider your market position in determining your price.

Discuss

What will your price point be?

Briefly discuss how you arrived at this price.

How does this support your market position?

Peer Answer:

HI class, Advance Auto Parts (AAP) is an automotive parts retailer, selling to both individuals (DIY market) and repair shops (professional install market). Because the market is fully mature and there is little, if any, product differentiation between AAP and its competitors (O'Reilly's, AutoZone, etc.), pricing is largely based on competitor pricing. That being said, they carry different brands in each product category for customers at different price points. For example, they carry low-, mid-, and high-grade motor oils. As the company notes in the 2022 Annual Report, competition is primarily focused on "brand recognition, customer service, product offerings, availability, quality, service with speed, price and store location" (Advance Auto Parts, 2023). By having different brands at different price points within the same product category, the company can ensure that they meet the expectations of different consumers. By having a larger product offering, they can both the quality and price expectations of different consumers. AAP is looking to increase market share in the professionally installed auto parts market. To do so, the company will need to have a first-degree price discrimination strategy by offering discounts to certain professional installers. Doing so will allow them to increase geographic footprint and be able to increase the number of stores and distribution center locations. Thanks, Evan