Pricing Essays

4.4 Pricing Strategy For a number of reasons, price is one of the most important aspects of an effective marketing strategy (Gerstein & Friedman, 2015). First, price is the only marketing variable that generates revenue. Second, buyers see price as an attribute of value (Tanner & Raymond, n.d.). Consequently, an organization must carefully assess its internal and external environment to choose the most effective pricing objective, which—in turn—will drive a product’s initial pricing strategy

Premium pricing is the practice of setting a price higher than the market price, in the expectation that customers will purchase it due to the perception that it must have unusually high quality or reputation. In some cases, the product quality is not better, but the seller has invested heavily in the marketing needed to give the impression of high quality. Premium pricing works best in the following circumstances: There is a perception among consumers that the product is a "luxury" product,

Predatory pricing is an anticompetitive strategy that indents to drive competitors out of the market and gain monopolistic profits. The logic of predatory pricing is very simple. The predatory firm first lowers its price, to an extent which the revenue of the product does not cover the costs. The competitors must then lower their prices below average cost, thereby losing money on each unit sold. If they do not cut their prices, they will lose competitiveness; if they do cut their prices, they will

By naming the pricing strategy “Fair and square”, JC Penney is assuming that customers believe that current prices are “unfair” and that JC Penney is coming to the rescue to give “fair” prices. There is no evidence to support that, in fact, customers are experts at navigating prices and discounts. It’s hard to believe customers perceive prices at department stores unfair, if 72% of what they buy has a deep discount. One of the big assumptions, stated by the CEO himself, is they knew that “customers

Johnson company) for the Product Nesol Pricing Strategy: For this product Nesol a key factor to maintain competitive advantage and profitability is our choice of pricing strategy. Some critical factors important to analyze in order to choose the right price points for Nesol are: • Cost of production: the cost of production remains an integral part of a pricing strategy if the company intends to make profits on the products being introduced into the market. Pricing should therefore cover costs of production

Evaluate pricing and non-pricing strategies that car retails might employ as means of competing with rival firms. A business can use a variety of pricing and non-pricing strategies when selling a product or service to maximize their profits for each unit sold. One pricing strategy that a car retailer can employ as means of competing with rival firms is optional pricing, this is widely used in the car industry due to its effectiveness. Optional pricing occurs when an organisation sells optional extras

1). Of the four available pricing method alternatives, the one I would suggest the Value-In-Use Pricing methodology for Atlantic. This pricing method defines the value of the product regarding what the consumer would lose or have to pay if the product or service was not available (Perfect Business). Tapping into the Atlantic brand combined with their industry position, and reputation for providing top-notch, highly reliable products will help to support the new pricing strategy. Analyzing and conveying

customers there, however, often means making a change in the market to have an affect on the product. Relying on Competitive pricing is risky if the amount of goods cannot be maintained or if the price suddenly rises. The product prices determine the revenue stream of prices . The pricing strategy we found suitable for Smartershare is Penetrating Pricing Startergy. Penetration pricing is the practice of offering a low price for a new product or service during its initial offering in order to attract customers

 Price and Pricing Strategies: NIKE uses Price Leadership strategy and value based pricing. This is when a company sets its price based on the value the consumer places on the product. NIKE has spent a lot of money to promote their brand as top of the range. Customers buy the product for the NIKE symbol and are willing to pay high prices regardless of the product’s actual value. A product‘s price has strong connections with its point in the life cycle. In the introduction phase, a skimming or a

The everyday low pricing strategy works best in a broader store positioning strategy and supported with advertising. Hi-Value doesn’t need to be the lowest priced supermarket in the area for the everyday low pricing strategy to work. Lowering pricing needs to be used by all in the area or else Hi-Value will confuse our store image and positioning. Hi-Value must look at recent consumer research to see how we are positioned and how this pricing will change our image. There is potential to reduce operating

The minimum price paid to Fairtrade producers is determined by the Fairtrade Standards and Pricing Unit. It applies to most Fairtrade certified products. This price aims to ensure that producers can cover their average costs of sustainable production. It acts as a safety net for farmers at times when world markets fall below a sustainable level. When the market price is higher than the Fairtrade Minimum Price, the buyer must pay the higher price. Producers and traders can also negotiate higher prices

Beta. Beta constitutes a tool to measure the volatility or the regular risk, of a security or a portfolio in parallel to the whole market. The use of Beta focus in the capital asset pricing model, which determines the return of an asset based on the expected market returns. Another name to Beta is the beta coefficient. Beta index on January 2016 was 0.79% while in 2015 was 1.01%. A low beta stock will protect a company in a general downturn. ROE Return on Equity. Return on equity (ROE) is the

industries with one or two prominent companies. Thus, it’s also referred to as “follow the leader.” The main advantage of competition-based pricing is that it’s easy to use, as extensive marketing research and statistical analysis are not required. Some disadvantages of competition-based pricing are that: o It is difficult to know how the competitor is pricing the product; it may or may not be the best way. o The price can no longer be used as a variable in the marketing mix because the business no

1. Compare the pricing strategies of Method, ReadyMade, and Acid+All. Do all of these relatively new brands use the same strategy? Explain. Method This, ReadyMade, and Acid+All all use the value-based pricing strategy. ReadyMade uses penetration pricing approach that sets their prices of magazines right below their competitors' prices due to the lack of a firm customer base. Acid+All sets the prices of their products above their competition as a premium (a luxury product) because of their customer

2. Two-part tariff: Optus Home Phone plans. Two-part Tariff pricing technique is a form of price discrimination used by a firm or industry that charges its consumers both an entry and usage fee. Optus charges its consumers a lump fee of $22 for home phone plans each month, for each unit price is 30 cents per local call or 28 cents per minute of standard national calls plus a connection fee of 52 cents (Optus 2017). Optus has market power as these phone plans are lock-in contracts for twenty-four

Review 1. Psychological pricing the organization establishes prices that appeal to tendencies in consumer behavior. It's a practice used more often by retailers than by manufacturers o Prestige Pricing - A situation where a high price contributes to the image of a product and to the status of the buyer. Example : Rolex o Odd-Even Pricing – Establishing prices below even dollar amounts. Example: pair shoes placed at $49.99 sounds better than $50.00 o Customary Pricing - Matching prices to a buyer’s

supply and demand in the market, and indirect and direct factors are contributed to setting the price of our product Advance Slim. Pricing also helps in increasing the image of Advance Slim and differentiate it with others product. We also used some types of pricing strategy such as penetration pricing, competition pricing, and psychological pricing. The penetration pricing

potential customers demographics in order to succeed this competitive market. (C. Breidert, 2007, p.9) 6.1.2.1 Pricing Strategy Pricing strategy that can be used by our company such as penetration pricing, cost-plus pricing, value based pricing and more. But we think that market penetration pricing is the best pricing strategy to be used by our business. Market penetration pricing is about setting a lower price on our product with aim to attract customers to buy our product because of the cheaper

Unit II Essay Pricing is the utmost important aspect of businesses. It can either break a company or help it prosper. Additionally, customers enjoy and look forward towards better pricing to get the best cost and the quality of the item desired. In this essay, topics related to pricing, trade and decision making will be discussed such as elasticity, marginal analysis in relation to pricing, opportunity costs, and improvement of business decisions. Elasticity Price elasticity is important for businesses

DEMAND SUPPLY EQUILIBRIUM POINT PRICE DISCRIMINATION Price Discrimination is also known as Price Differentiation. It is a pricing policy where homogenous products or similar products (rice, wheat, fruits, vegetables etc) are executed at different prices by the same supplier in different areas or location. For example, the price of dozen of bananas is Rs. 100 in Karachi while