Posted in Marketing and Strategy Terms, Total Reads: 633
Definition: Recommended Retail Price
Recommended Retail Price RRP is also referred to as manufacturer’s suggested retail price or list price. It is the price at which the retailer is required to sell a product as per the manufacturer’s suggestion. But often the slow moving goods are sold at a price lesser than the RRP in order to boost sales.
The logic behind the manufacturer suggesting a price is to maintain standardized prices across different stores and different locations thereby ensuring fairness in pricing.
RRP may not match the final price at which the retailers sell a product or the price customers are willing to pay for a product. The sales in the automobile industry clearly demonstrate the concept of Manufactured Suggested Retail Price. In US, in order to avoid the retailers from charging very high mark ups the MSRP is required to be labelled on the windows of all new vehicles. This enables the consumers in getting a fair idea of the actual price of the vehicle as suggested by the manufacturer.