Price and cost variables are not fixed. At times, there are some fixed elements to these costs but in many instances these costs are subject to fluctuation. These fluctuations can derive from changes in buying power, changes in commodity prices and other considerations. Likewise, forces in the external environment can bring about changes in the prices the firm can charge. When uncertain variables are fixed, the company can find that margins do not hold as expected, which can compromise profit. In addition, the price can be set on the basis of variables on the assumption that the costs are relatively fixed. When these costs provide not to be fixed, the price does not deliver a strong enough margin. The impacts of these types of decisions can be far-reaching. Firms can decide to enter markets that are not profitable, and make decisions with respect to their product line-ups on the basis of uncertain information. The risk associated with the pricing decision increases significantly when there are uncertain variables in the costs and prices of a product.
2. There are a number of motivations that managers might have to undercut a stated pricing strategy. The most important class of motive lies with the external environment, in particular the relationship between price and demand for a given product (Goetz, 1985). A manager may see an opportunity in the marketplace and undercut the strategy in order to make marketing, but with input from a number of different parts of the organization. The reason is that there are two main levels on which the pricing decision is made -- the long-term strategic level and the short-term tactical level (Hurwich, no date). The pricing decision is made on the basis of a product's variable costs, the company's fixed costs, the competitive environment for the product and the expected shape of the demand curve. The marketing department has knowledge about the last two, but relies on the production department and the accounting department for the first two. The CEO may also have input, if the product is sufficiently important to the firm's overall strategy. Finance, sales and other ancillary departments may also contribute to the decision, particularly at the short-term level when price changes will have less long-run impact on the company's strategy.
The different departments may not all agree on the best price for a given product. It must be remembered, however, that the long-term pricing strategy must be consistent with the company's strategic objectives. In the…
Pricing Strategy and Distribution Pricing and Distribution Strategy Analysis The most critical series of decisions any company makes are which distribution channels and pricing strategies to rely on for each product or service they offer. Pricing is the most strategic factor in any marketing, supply chain and production series of decisions because they not only send a very clear message of market value, they also have an immediate impact on profitability (Dudick,
Pricing Comparing the Pricing Strategies of Media Distributors (NetFlix) And Canned Food Pricing strategies vary significantly by the type of product or service, its supply chain, timeliness of delivery and consumption constraints (as is the case with live events) and the value-based costing used as the basis of creating the product or service. All of these components must also be coordinated together to create a unified message to the market, strengthening the position
Pricing Strategies There are a number of factors that go into a firm's pricing strategy. The firm can consider the prices offered by competitors and the firm's own desired competitive position. It can base prices on the cost of production. The firm must consider the price elasticity of the demand for the good. The company can also choose from a number of different strategies, based on this demand curve: revenue maximization,
Price Setting Setting the right price is important for any product. There are many different approaches, based on the different variables that can be considered. For a new product in the marketplace, getting the price right is all the more difficult, because there is no prior data to help gauge the strength of the current brand, the price elasticity of demand or other factors that might come into play when pricing
The focus on making patients the winners and allowing them to be the stars of the treatment programs is also what differentiates excellent branding in healthcare. Concentrating on making patients the center of the value chain is critical (Garland, 1993). Postulate potential barriers to your talent plan for becoming a dentist. My talent plan for becoming a dentist is aggressive, focused and will require nothing less than total commitment. I am
Pricing Strategy There are several critical factors that affect making pricing decisions: customers, competitors, regulations, government laws, the overall economy, and production costs and some of the most important variables to look at when deciding on a pricing strategy. As Zeng, Dasgupta and Weinberg (2016) put it, differentiation is key to developing a pricing strategy that works for a company that has to set itself apart from competitors in order to