Product price and its impact on consumers

Peer Discussion

I agree with your assessment related to the value of pricing and its important within the overall business dynamic. Here, the right pricing is critical to not only generating adequate revenue, but pricing is also used to articulate a compelling value proposition to the consumer. Here, pricing can be used as a psychological indication of value to the consumer. Higher priced items for example, are often associated with higher quality products, even if this is not the case. Likewise, lower priced items are often seen as lower in value, which again could be an incorrect assumption. I also agree with you assertion that different markets require different pricing models. Certain markets such as the United States and Europe can absorb higher price increases, while developed markets may be unable to properly do so. It is critical for pricing to adequate reflect the ability of the consumer to pay or the company can risk losing valuable market share.

Peer Discussion 2

I agree with having a pricing strategy that aligns with the lifecycle of the product. This is vital as it helps to attract and retain customers who otherwise may have avoided purchasing the products altogether. In addition, through various pricing strategies through the overall product lifecycle, businesses can better encourage adoption of certain products over others. Apple along with other phone manufacturers have used this strategy extensively to encourage consumers to use their ecosystem of products. By encouraging consumers to adopt prices at a low price point, consumers are now introduced to the company ecosystem which prevents competitors from taking market share. Once a consumer is in the ecosystem, the company then introduces higher priced products that contribute to higher profitability and margins.