The Suggested Retail Price (SRP) is a non-binding recommendation from a manufacturer to retailers about the proposed base selling price customers should be charged for a product. It serves the following purposes:
- Sets an expected baseline value in customers’ minds for pricing consistency across different retail locations.
- Provides retailers with a standard price point to anchor their own promotional pricing strategies, such as temporary discounts or sales.
- Allows manufacturers to influence brand perception while giving retailers autonomy over final prices.
- SRP may vary regionally or seasonally to adjust for supply and demand factors affecting different markets.
- Manufacturers monitor adherence to gauge appropriate market positioning versus competitors.
- Retailers use SRP flexibility to attract customers via value messaging, while still referring to the manufacturer’s recommended standard price.
While retailers can adjust asking costs, SRP acts as a consensus guideline communicated to end users regarding a product’s typical worthwhile cost. This balances stakeholder goals around consistent value and temporary competitive pricing.