Pricing Decisions
In today's competitive environment, pricing has emerged as a critical business competency. Executives in consumer, industrial, and service sectors must be prepared to face complex pricing challenges and to leverage pricing in order to capture the greatest market advantage.

One of the things in setting prices, the management should look at the elasticity of demand. Elasticity is simply a measure of how items respond to changes in price. The goal is to provide reliable reporting of the sensitivity of an item to a change in shelf price. In analytical terms, elasticity measures the impact of a one-percent change in shelf price (increase or decrease) on revenue. An elasticity of 1.0, for example, would indicate a one-percent decrease in revenue relative to the price change. An elasticity of 2.0 would show a two-percent decrease in revenue for the price change, and so on. Clearly, as the elasticity numbers grow larger, the…...

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References

Ingenbleek, Paul, Debruyne, Marion, Frambach, Ruud, and Verhallen, Theo M.M. Successful New Product Pricing Practices: A Contingency Approach. Marketing Letters, Vol. 14, No. 4; (2003): 289

Lowengart, Oded, Mizrahi, Shlomo, and Yosef, Rami. Effect of consumer characteristics on optimal reference price. Journal of Revenue and Pricing Management, Vol. 2, No. 3; (2003): 201

Following this analysis, there are several alternative solutions that the team can adopt for the season. All alternative solutions take into consideration (1) the concessions and the right balance between the price of the tickets and the price of concessions and (2) the way the pricing strategy will encourage the participation of people to the games of the local team. Following this, the alternative solutions seem to include:

- offering a low ticket price and keeping the concessions price reasonably high to complete the company's revenues;

- offering a medium to high individual ticket, corroborated with a lower 5-game and full and half-season packages, in order to encourage people to purchase these forms of tickets;

- keeping all ticket prices reasonably high, assuming that the alternatives to the local minor league baseball team are not that numerous.

As always, the best solution seems to be a combination of the alternative solutions presented previously and…...

Opportunities:

a) the fast growth specific to the Russian market - if only 53% of women reported using regular pads in 1996, a year later, the percentage of women stating the same thing increased to 78% (i.e. A 47% increase) b) the negative perception of tampons allowing a generous market share for pads - if in 1996, 37% of women reported using tampons on a regular basis, in 1997, only 20% of them continued to use such products c) the Russian women's tendency to move from traditional pads to the more sophisticated ones using Ultra technology and having wings (Plus) - in 1997, Always Plus registered a 5.2% unit share compared with Always Classic which reported a 2.9% unit share for the same year while Always Ultra reported a unit share five times higher that the one in the previous year.

Threats:

a) the high uncertainty of the Russian market due to unpredictable…...

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Bibliography

1. Arnold, David. "Procter & Gamble: Always Russia." Harvard Business School, 2001.

Pricing Strategies
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. hen 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. hen 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…...

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Works Cited:

NetMBA.com (2010). Pricing strategy. NetMBA.com. Retrieved February 25, 2011 from  http://www.netmba.com/marketing/pricing/ 

Goetz,

J. (1985). The pricing decision: A service industry's experience. Journal of Small Business Management. Retrieved February 25, 2011 from  http://www.questia.com/googleScholar.qst?docId=5001688166 

Hurwich, M. (no date). The pricing decision -- who makes it and who makes it work? SPMG. Retrieved February 25, 2011 from http://www.pricingexperts.net/The_pricing_decision_who_makes_it.pdf

Pricing Decisions Describe the strategic implications that would need to be considered in setting a price for that product
The public company selected for this analysis is Coca Cola Company. The identified product of the company is the Coca-Cola 20 fl oz bottle, which can be typically obtained from a convenient store, vending machine as well as super market. There are strategic implications that would need to be taken into consideration in setting the price of this particular product, which include the following:
1. Competition in the market
Rivals in the market have a significant impact on pricing decisions. Imperatively, the comparative market shares of market rivals impacts whether an organization can set prices independently or whether such decisions take into account the direction taken by competitors. In this case, Coca Cola Company faces intense competition from brands such as Pepsi and Dr. Pepper who have also unveiled similar products. Despite its dominance in…...

Pricing and Distribution:
As an extremely important decision for a company, pricing is the only element of the marketing mix that generates revenue. The positioning of a product in the market is dependent on its pricing since customers tend to greatly resist attempts to change price once it has been set up. As compared to other elements in the marketing mix, price is the variable with which a competitive response can be quickly implemented. On the contrary, distribution basically involves the process of getting the product from the manufacturer to the intended consumer.

How Pricing and Distribution Complement each other at Costco:

Costco is a company that has itself as a means with which brides and grooms can create an unforgettable wedding day through reasonable prices. In the past few years, the warehouse store sells all wedding-related accessories including engagement rings, invitations, flowers, and trips for honeymoon. While it's difficult to quantify the…...

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References:

Berk, C.C. (2011, March 7). Here Comes the Bride, All Dressed by Costco. Retrieved January

17, 2012, from  http://www.cnbc.com/id/41950692 

Bertini, M. & Wathieu, L. (2010, May). How to Stop Consumers from Fixating on Price.

Harvard Business Review, 88. 48-91.

From a supply chain standpoint, pricing departments must also create a high level of communication and collaboration across a business as well. Their role is to be the orchestrators of internal effort to manage suppliers to pricing and margin levels, ensuring consistency and focus on share goals. This is one of the primary reasons pricing has now become a strategic initiative within many businesses. For change to occur in how companies do their pricing strategies, it often takes a senior executive to manage the change in processes and systems to ensure pricing becomes strategy and shifts away from being tactical in focus (Marn, oegner, Zawada, 26).
From the sell-side or the distribution and selling channels standpoint, pricing has never been more critically important to a company's profitability. The continued consolidation of industries and commoditization of products making tracking pricing elasticity by product category critical, especially when they are sold through…...

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References

Manu Carricano, Jean-Francois Trinquecoste, and Juan-Antonio Mondejar. "The rise of the pricing function: origins and perspectives. " the Journal of Product and Brand Management 19.7 (2010): 468.

Thomas H. Davenport. "Make Better Decisions. " Harvard Business Review 1 Nov. 2009

Vrinda Kadiyali, Pradeep Chintagunta, and Naufel Vilcassim. "Manufacturer-retailer channel interactions and implications for channel power: An empirical investigation of pricing in a local market. " Marketing Science 19.2 (2000): 127.

Krishna, a., F. Feinberg, and Z. Zhang. "Should Price Increases Be Targeted?-Pricing Power and Selective vs. Across-the-Board Price Increases. " Management Science 53.9 (2007): 1407-1422.

This virtually means that the company's reputation could suffer demises.
Telemarketing efforts are often constructed on impulse buys and psychological pricing, such as $19.99 instead of a round $20.00 or a "limited offer" deal in which the price is reduced from $30.00 to $19.99. This context makes the psychological pricing strategy suitable for the company.

4. Product-line Pricing

Advantages:

Sets a single unique price on all products coming from a product line, reducing as such the complexities which come from setting different prices and using differentiated strategies for each product category

Pushes towards the lowest retail price possible and generates as such customer satisfaction. Additionally, through increased consumer satisfaction, higher levels of volume sales are generated.

Disadvantages:

Damages the organizational productivity and profitability

Denies the existence of differences between the products

Forces down the quality of the items by strengthening on the importance of a low retail price

The prioritization of the low retail price on the product line…...

Pricing Management
Determinants of Pricing Strategies

In pricing a new, specialized electronic product, the product development, engineering, marketing, accounting and finance teams internally will rely on internal and external factors to initially set the price. Pricing objectives and the frameworks they require will determine the internal factors included and excluded from the long-term pricing strategy overall (Avlonitis, Indounas, 2005). The intent of this analysis is to evaluate the other internal factors that will affect the pricing of a new, specialized electronic product.

Analysis of Internal Factors Affecting Pricing

ased on personal experience managing high technology products and from anecdotal interviews with members of product marketing teams in high technology businesses, the decision of whether to choose a value-based vs. cost-based approach to pricing is foundational to how many other internal factors affect price (Wagner, 1981). Value-based pricing will have a direct effect on the price elasticity of demand for a given product (Michalakelis, Dede,…...

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Bibliography

Avlonitis, G.J. & Indounas, K.A. 2005, "Pricing objectives and pricing methods in the services sector," The Journal of Services Marketing, vol. 19, no. 1, pp. 47-57.

Casey, M.P. 1985, "International Transfer Pricing," Management Accounting, vol. 67, no. 4, pp. 31.

Lucke, D., Philipp, J.H.S. & Schumacher, D. 2005, "A Note on R&D and Price Elasticity of Demand," Jahrbucher fur Nationalokonomie und Statistik, vol. 225, no. 6, pp. 688-698.

Michalakelis, C., Dede, G., Varoutas, D. & Sphicopoulos, T. 2010, "Estimating diffusion and price elasticity with application to telecommunications," Netnomics: Economic Research and Electronic Networking, vol. 11, no. 3, pp. 221-242.

46). Likewise, Gillispie suggests that an incremental approach can be used to "test the waters" for even very small companies seeking to project an internationalized presence. In this regard, Gillespie recommends that companies, "Craft a scaleable master design that represents the major aspects of your business worldwide and anticipates the degree of localization that will be required in each market. The degree of localization can have a real impact on budgets and timelines" (2008, p. 45). These are important factors for companies in general where limited resources and a lack of experience may preclude more aggressive internationalization initiatives, and these issues are directly related to a company's internal resources as discussed further below.
Internal resources

The company has a wide range of specialized internal resources which are described in Table 2 below.

Table 2

Internal resources of BG Limited

Business Unit

Description

Specialist Cleaning

BG's Specialist Cleaning division offers a comprehensive range of services designed to restore…...

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References

Angola. 2011 CIA World Factbook. [online] available:   / the-world-factbook/geos/ao.html.https://www.cia.gov/library/publications 

Black's Law Dictionary. 1999 St. Paul, MN: West Publishing Co.

Carthew, A. 2006, September/October 'Spreading the Word.' Communication World, vol. 23,

no. 5, pp. 30-32.

The penetration pricing strategy is intended to be temporary, such that once the desired market effect has occurred -- the penetration has been made -- the price is then put to a more "normal" price.
An example of this in recent news is the introduction by Burger King of BK Smooth Roast Coffee. This new blend of coffee was developed to make Burger King more competitive in the fast food breakfast business, where it trails the market leaders badly. The new blend was offered with an introductory price of 25 cents (QSR eb.com, 2013). The objective of this pricing strategy was twofold. The first objective was penetration -- to get people to try the coffee in the hopes of winning over some converts. Ideally, the customer would come in daily during the promotion because this is the cheapest coffee around, and develop a habit.

The other objective is to bring people…...

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Works Cited:

Clow, J. (2012). What small businesses can learn from Google. USA Today. Retrieved March 9, 2013 from  http://usatoday30.usatoday.com/money/smallbusiness/story/2012-05-27/small-business-can-learn-from-google/55188670/1 

QSR Web. (2013). Burger King celebrates new coffee with 25-cent promotion. QSR Web. Retrieve March 9, 2013 from  http://www.qsrweb.com/article/208731/Burger-King-celebrates-new-coffee-with-25-cent-promotion

In other words, throughout the transition period, Onetech would create efficiencies and would consolidate its position. In the future however, it is recommended that the company moved towards a strategy of diversification, as this would better satisfy customers' needs, attract them and as such create market power for the firm (Markides, 2007).

The decision making process at Onetech

The decision making process at Onetech is quite intricate, revealing both strengths, as well as weaknesses. Decisions are for instance made at the level of the board and are based on the expertise gathered by the various major players in the firm. Still, the decisions are made by the executives, with little emphasis on the input which could be provided by the employees.

In order to better assess the decision making process at Onetech, it is appropriate to analyze it through the lenses of the rational decision making model. This model consists of a series…...

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References:

Cologon, D.R., Cohen, D.R., 2008, FileMaker Pro 9 Bible, John Wiley and Sons

Hage, M., 2007, A stakeholder concern towards an economix theory on stakeholder governance, Uitgeverij Van Gorcum

Jacobs, P.K., 2000, Minding the muse: the impact of downsizing on corporate creativity, Harvard Business School,   last accessed on November 30, 2011http://hbswk.hbs.edu/item/1518.html 

Markides, C.C., 2007, Diversification, refocusing and economic performance, MIT Press

Decision-Tree Analysis
The optimal payoff is $0, which would occur under scenario D1, O1.

The EMV for the first decision, which is the decision not to evacuate, is the highest. The reason for this is that the costs associated with the hurricane hitting the area, and the area not being evacuated, are very high. If the hurricane does not hit, the do nothing option has the lowest cost, but because of the risk of the hurricane hitting at least partially, the EMV for this option is the highest. The EMV for the second decision is the second-highest. This is a recommended evacuation, which incurs some costs, but a lower dollar value than the cost of a full evacuation. There are some savings, but the EMV is still fairly high.

The lowest EMV comes with a mandatory evacuation. This has the highest base incurred cost, but the likelihood that the hurricane will miss the…...

The businesses all utilize the same brand, but are otherwise quite different from one another. ithin the main retail business, the breakdown by geography is also logical, because there are some product and service differences between the geographic regions. The regional breakdowns also allow for better management and more direct corporate control. For example, having a manager for the Asia Pacific region who is based in the region allows for closer monitoring of the company's efforts in each different market, essential since for the most part Starbucks' Asian properties are owned by large franchise operators.
There is little cause for making changes to the job design. The functional design with geographic groupings subordinated reflects that first and foremost Starbucks is about a set of product/service offerings. The geographical scope of those offerings is secondary to the offering itself. The cafe business, for example, cannot have much meaningful input into the…...

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Works Cited:

2011 Starbucks Annual Report. Retrieved June 15, 2012 from  http://investor.starbucks.com/phoenix.zhtml?c=99518&p=irol-reportsannual 

Brickley-Smith-Zimmerman. (2008). Managerial Economics and Organizational Architecture, Fifth Edition. McGraw-Hill.

Value-based pricing is critically important in B2B marketing and selling scenarios as well, as the value delivered by enterprise software for example determines the percentage of maintenance paid every year (Hinterhuber, 2004). These maintenance payments yearly form the foundation of Oracle Corporations;' viability, in addition to many hundreds of other enterprise software companies. As a result of the critical role of value-based pricing in market positioning, companies have created pricing and revenue management enforcement strategies (oll, 2009) to ensure their resellers, channel partners, dealers and service organizations do not price below the minimum threshold and I so doing erode the market position as defined by the premium price.
Summary

Studies indicate that to the extent a company can successfully manage and fine tune value-based pricing over time is the extent to which they can experience revenue and profit growth even in the middle of a recession (Garrow, Ferguson, 2009). Value-based pricing…...

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References

Dunleavy, H., and G. Phillips. 2009. The future of airline revenue management. Journal of Revenue and Pricing Management: Special Issue: 'AGIFORS Conference' 8, no. 4, (August 1): 388-395.

Garrow, L., and M. Ferguson. 2009. Staying ahead of the curve: Using revenue management to help survive an economic downturn. Journal of Revenue and Pricing Management: Special Issue: Distribution and Revenue Management 8, no. 2-3, (March 1): 279-286.

Andreas Hinterhuber. 2004. Towards value-based pricing - An integrative framework for decision making. Industrial Marketing Management 33, no. 8, (November 1): 765-778.

Michael V Marn, Eric V Roegner, and Craig C. Zawada. 2003. The power of pricing. The McKinsey Quarterly no. 1, (January 1): 26-39.