What does the term Suggested Retail Price (SRP) refer to?

The term Suggested Retail Price (SRP) refers to the price that a manufacturer recommends a retailer set for a product. This pricing strategy is intended to provide guidance to retailers on what price they should charge to maintain brand integrity and market positioning while also ensuring that they achieve a reasonable profit margin. The SRP takes into account various factors, including production costs, target market, competition, and perceived value of the product.

By establishing an SRP, manufacturers help standardize pricing across different retailers, which can simplify consumers' shopping experience by reducing price confusion. When retailers adhere to this suggested price, it can also help maintain the product's perceived value and brand image in the marketplace. This alignment between manufacturer recommendations and retail pricing is crucial for effective merchandise management and inventory strategies.