Jun 23, · Pricing strategy refers to method companies use to price their products or services. dissertation on pricing strategy THE ROLE OF PRICING STRATEGY IN MARKET DEFENSE A Dissertation Presented to The Academic Faculty by Can Uslay In Pricing Strategy and Revenue Models. A Multiple Case Study from the IT Service Sector in Finland. Master’s Thesis Joonas Wuollet Information and ServiceFile Size: KB Apr 20, · Pricing Strategies Definition. Pricing is a powerful element of a small business’s marketing strategy. The pricing structure of your Penetration Pricing. A small company that uses penetration pricing typically sets a low price for its product or service Limit pricing. A
Pricing Strategies Free Essay Example
An analysis of pricing strategy reveals that companies have a range of options in their pricing toolkit they can use to augment their marketing initiatives.
Pricing strategy refers to method companies use to price their products or services. Almost all companies, large or small, base the price of their products and services on production, labor and advertising expenses and then add on a certain percentage so they can make a profit.
Dissertation on pricing strategy are several different pricing strategies, such as penetration pricing, price skimming, discount pricing, product life cycle pricing and even competitive pricing. Different Types of Pricing Strategies. A small company that uses penetration pricing typically sets a low price for its product or service in hopes of building market share, which is the percentage of sales a company has in the market versus total sales.
The primary objective of penetration pricing is to garner lots of customers with low prices and then use various marketing strategies to retain them. For example, a small Internet software distributor may set a low price for its products and subsequently email customers with additional software product offers every month.
A small company will work hard to serve these customers to build brand loyalty among them. Another type of pricing strategy is price skimming, dissertation on pricing strategy which a company sets its prices high to quickly recover expenditures for product production and advertising.
The key objective of a price skimming strategy is to achieve a profit quickly, dissertation on pricing strategy. Instead, the company will use the quick spurts of cash to finance additional product production and advertising. Product Life Cycle Pricing. All products have a life span, called product life cycle. A product gradually progresses through different stages in the cycle: introduction, growth, maturity and decline stages.
During the growth stage, when sales are booming, a small company usually will keep prices higher. A company that prices its products high in the growth stage also may have a new technology that is in high demand. Competitive-Based Pricing. There are times when a small company may have to lower its price to meet the prices of competitors. A competitive-based pricing strategy may be employed when there is little difference between products in an industry.
For example, when people purchase paper plates or foam cups or a picnic, they often shop for the lowest price when there is minimal product differentiation. Consequently, a small paper company may need to price its products lower or lose potential sales. Temporary Discount Pricing. Small companies also may use temporary discounts to increase sales. Temporary discount pricing strategies include dissertation on pricing strategy, cents-off sales, seasonal price reductions and even volume purchases.
For example, a small clothing manufacturer may offer seasonal price dissertation on pricing strategy after the holidays to reduce product inventory. A volume discount may include a buy-two-get-one-free promotion.
Cost-Plus pricing. Cost-plus pricing is the simplest pricing method. The firm calculates the cost of producing the product and adds on a percentage profit to that price to give the selling price. This method although simple has two flaws; dissertation on pricing strategy takes no account of demand and there is no way of determining if potential customers will purchase the product at the calculated price. This appears in two forms, full cost pricing which takes into consideration both variable and fixed costs and adds a percentage as markup.
The other is direct cost pricing which is variable costs plus a percentage as markup. The latter is only used in periods of high competition as this method usually leads to a loss in the long run. A limit price is the price set by a monopolist to discourage economic entry into a market, and is illegal in many countries.
The limit price is the price that the entrant would face upon entering as long as the incumbent firm did not decrease output. The limit price is often lower than the average cost of production or just dissertation on pricing strategy enough to make entering not profitable.
The quantity produced by the incumbent firm to act as a deterrent to entry is usually larger than would be optimal for a monopolist, but might still produce higher economic profits than would be earned under perfect competition. This means that for limit pricing to be an effective deterrent to entry, the threat must in some way be made credible. A way to achieve this is for the incumbent firm to constrain itself to produce a certain quantity whether entry occurs or not.
An example of this would be if the firm signed a union contract to employ a certain high level of labor for a long period of time. In this strategy price of the product becomes the limit according to budget. A loss leader or leader is a product sold at a low price i. at cost or below cost to stimulate other profitable sales.
This would help the companies to expand its market share as a whole. Setting a price based upon analysis and research compiled from the target market.
This means that marketers will set prices depending on the results from the research. Price discrimination is the practice of setting a different price for the same product in different segments to the market. For example, this can be for different classes, such as ages, or for different opening times.
Premium pricing is the practice of keeping the price of a product or service artificially high in order to encourage favorable perceptions among buyers, based solely on the price. The practice is intended to exploit the not necessarily justifiable tendency for buyers to assume that expensive items enjoy an exceptional reputation, are more reliable or desirable, or represent exceptional quality and distinction.
It is illegal in some countries. to operating income is maximized when a price is chosen that maximizes the following: contribution margin per unit X number of units sold. Pricing designed to have a positive psychological impact.
There are certain price points where people are willing to buy a product. A minor distinction in pricing can make a big difference is sales. Dissertation on pricing strategy company that succeeds in finding psychological price points can improve sales and maximize revenue. A flexible pricing mechanism made possible by advances in information technology, and employed mostly by Internet based companies. The airline industry is often cited as a dynamic pricing success story.
In fact, it employs the technique so artfully that most of the passengers on any given airplane have paid different ticket prices for the same flight. An observation made of oligopolistic business behavior in which one company, usually the dominant competitor among several, leads the way in determining prices, the others soon following, dissertation on pricing strategy.
The context is a state of limited competition, in which a market is shared by a small number of producers or sellers. Pricing method whereby the selling price of a product is calculated to produce a particular dissertation on pricing strategy of return on investment for a specific volume of production, dissertation on pricing strategy. The target pricing method is used most often by public utilities, like electric and gas companies, and companies whose capital investment is high, like automobile manufacturers.
Target pricing is not useful for companies whose capital investment is low because, dissertation on pricing strategy, according to this formula, the selling price will be understated. Also the target pricing method is not keyed to the demand for the product, and if the entire volume is not sold, dissertation on pricing strategy, a company might sustain an overall budgetary loss on the product. Method of pricing in which all costs are recovered. The price of the product includes the variable cost of each item plus a proportionate amount of the fixed costs and dissertation on pricing strategy a form of cost-plus pricing.
Method of pricing for an dissertation on pricing strategy where the goods or services offered by the organization are regularly priced higher than competitors, but through promotions, advertisements, and or coupons, dissertation on pricing strategy, lower prices are offered on key items. The lower promotional prices are designed to bring customers to the organization where the customer is offered the promotional product as well as the regular higher priced products.
Method of pricing where an organization artificially sets one product price high, in order to boost sales of a lower priced product. In business, the practice of setting the price of a product to equal the extra cost of producing an extra unit of output. By this policy, a producer charges, for each product unit sold, only the addition to total cost resulting from materials and direct labor. Businesses often set prices close to marginal cost during periods of poor sales.
The business would choose this approach because the incremental profit of 10 cents from the transaction is better than no sale at all. Pricing a product based on the value the product has for the customer and not on its costs of production or any other factor.
This pricing strategy is frequently used where the value to the customer is many times the cost of producing the item or service. For instance, the cost of producing a software CD is about the same independent of the software on it, but the prices vary with the perceived value the customers are expected to have.
The perceived value will depend on the alternatives open to the customer. In business these alternatives are using competitors software, using a manual work around, or not doing an activity. Pay what you want is a pricing system where buyers pay any desired amount for a given commodity, sometimes including zero. The buyer can also select an amount higher than the standard price for the commodity.
Giving buyers the freedom to pay what they want may seem to not make much sense for a dissertation on pricing strategy, but in some situations it can be very successful.
While most uses of pay what you want have been at the margins of the economy, or for special promotions, there are emerging efforts to expand its utility to broader and more regular use.
Freemium is a business model that works by offering a product or service free of charge typically digital offerings such as software, content, games, web services or other while charging a premium for advanced features, functionality, or related products and services. It has become a highly popular model, with notable success.
In this type of pricing, the seller tends to fix a price whose last digits are odd numbers. This pricing policy is common in economies using the free market policy.
Method of pricing where the seller offers at least three products, and where two of them have a similar or equal price.
The two products with the similar prices should be the most expensive ones, and one of the two should be less attractive then the other. This strategy will make people compare the options with similar prices, and as a result sales of the most attractive choice will increase.
Pricing strategies for products or services encompass three main ways to improve profits. These are that the business owner can cut costs or sell more, or find more dissertation on pricing strategy with a better pricing strategy. When costs are already at their lowest and sales are hard to find, adopting a better pricing strategy is a key option to stay viable.
Merely raising prices is not always the answer, especially in a poor economy. Dissertation on pricing strategy businesses have been lost because they priced themselves out of the marketplace, dissertation on pricing strategy. One strategy does not fit all, so adopting a pricing strategy is a learning curve when studying the needs and behaviors of customers and clients. Pricing Strategies, dissertation on pricing strategy. Accessed July 31,
Pricing Strategies
, time: 8:19Dissertation Topic On Pricing Strategy
Pricing Strategy and Revenue Models. A Multiple Case Study from the IT Service Sector in Finland. Master’s Thesis Joonas Wuollet Information and ServiceFile Size: KB Title of Thesis: Pricing Strategies and Customer Retention Title of Thesis 2: The Case of Airtel (T) Ltd Bachelor's thesis, pages 55 May This Bachelor’s thesis was done under the consent of Airtel (T) Ltd with a major purpose of finding the correlation between pricing strategies and customer retention Nov 05, · The plan of action types commonly used financial performance standards should be open to the pricing on dissertation strategy function of angle does it take before the greeting. Members of such a way to relate the angular momenta, and the mass and its use, and what you see at a high number internationally respected research university the sociological quarterly
No comments:
Post a Comment