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Pricing strategy needs to take into account a number of different factors. These include the costs of production, the positioning of the product, competitive pricing, and the customer's willingness to pay. Selling Chapman's ice cream to the United Arab Emirates is going to take into account some of these more than others.
With respect to cost of production, there are two factors that need to be taken into consideration. The first is the cost of production and the second is the cost of distribution. Costs of production are high. Factors include the cost of milk, which is protected in Canada and therefore higher than in many competing countries, and the high cost of Canadian labour. Since Chapman's uses premium ingredients, the conclusion is that the factor cost of production is high. The market in the UAE for specialty ice cream is relatively small, so there is no real opportunity to…
Pricing Strategy and Channel Distribution
Pricing Strategy .
Legal and Ethical Issues elated to the Pricing Tactics .…
Marketing Distribution Channel Analysis
Distribution Strategy Fitting Marketing Objectives & #8230
In this case, Atlantic Computers has a plethora of various pricing strategies available to use for its interesting new server. The server has a unique software component which if it is installed with the server as a package then the server becomes extremely more productive in processing certain computing tasks. In fact, for some users the software used in conjunction with the server can perform as well as four servers from a competing vendor. This position represents the source of the pricing dilemma. The company can used a traditional cost-plus pricing structure or they could focus on value pricing. It is recommended that server and software price be set roughly at a level that would be slightly less than…
Iacobucci, D. (2011). Marketing management: 2010 custom edition. Mason, OH: South-
Western C-ngag? Learning.
Pricing strategy for our new product is going to be penetration pricing. This strategy involves undercutting the competition on price in order to win market share. Undercutting does not necessary mean that the firm with follow a cost leadership strategy, but it implies that the firm will price below the prices of competing products with similar attributes. A penetration pricing strategy implies that the firm will maintain the low price in order to build market share. The price may be raised at a later date when the product has an established share of the market, signaling an end to the penetration pricing strategy.
Value pricing is a tactic that can be used. Ultimately, the pricing strategy needs to convey to the consumer that this product is a good value relative to similar products that are on the market. Baker (2009) notes that value pricing both "offers the firm the ability…
Baker, R. (2009). Pricing on purpose: How to implement value pricing in your firm. Journal of Accountancy. Retrieved November 11, 2011 from http://www.journalofaccountancy.com/Issues/2009/Jun/20091530.htm
Inc. Magazine. (2011). Penetration pricing. Inc.Magazine. Retrieved November 11, 2011 from http://www.inc.com/encyclopedia/penetration-pricing.html
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, 1989). The intent of this analysis is to determine and discuss the best possible pricing strategy for a new tablet PC that would compete directly with the Apple iPad. Second, the pricing tactics, legal and ethical issues, use of differential pricing is also discussed. Next a marketing distribution channel analysis is defined along with a description of how it fits the overall marketing objectives align with launching a new tablet PC.
Pricing Analysis for a Proposed Tablet PC…
Dong-Qing, Y., & Liu, J.J. (2005). Competitive pricing of mixed retail and e-tail distribution channels. Omega, 33(3), 235-247.
Dudick, T.S. (1989). Pricing strategies for manufacturers. Strategic Finance, 71(5), 30-30.
Frazier, G.L. (1999). Organizing and managing channels of distribution. Academy of Marketing Science.Journal, 27(2), 226-240.
Gattorna, J. (1978). Channels of distribution conceptualisations: A state-of-the-art review. European Journal of Marketing, 12(7), 471-471.
Pricing Strategy and Distribution
Build-to-Order Netbook Marketing Plan
Pricing and Channel Distribution Strategies
The two most critical aspects of any marketing strategy are the pricing and distribution strategies, as they both underscore the branding, unique value proposition and position of products. Both have an immediate and multiplicative effect on the profitability and revenue growth of a product line and long-term, to an entire business. The intent of these sections of the marketing plan is to define the pricing and distribution channel strategies for the build-to-order netbook called Eleftria, which is the Greek word for freedom. In discussing the pricing strategy, the tactics, legal and ethical issues, and implications on brand value are discussed. In addition, the distribution channel analysis of the build-to-order netbooks is also provided. Included in this analysis is a description of how the distribution strategy fits the product and service, target market and overall marketing objectives of…
Zuhair Al-Obaidi, Mika Gabrielsson. (2002). Sales Channel Strategies in Export Marketing of Small and Medium Sized High Tech Companies. Journal of Euro - Marketing, 12(2), 5-27.
Josh Bernoff, Charlene Li. (2008). Harnessing the Power of the Oh-So-Social Web. MIT Sloan Management Review, 49(3), 36-42.
Berger, A., Grigoriev, A., & van Loon, J.. (2011). Price strategy implementation. Computers & Operations Research, 38(2), 420.
Boyle, P., & Lathrop, E.. (2009). Are consumers' perceptions of price-quality relationships well calibrated? International Journal of Consumer Studies, 33(1), 58-63.
How well does Apple create value for its market segments? Explain.
The way that Apple creates value for its market segments is by finding areas that are emerging, as a new way to incorporate technology into daily life. Where, there is an emphasis on implementing the latest technology with: changes in the industry and transpiring demand (to redefine how people are entertained). A good example of this can be seen with the I Pod. What happened was the company wanted to find a way to address changes that were taking place in way people were: listening to and downloading music. The I Pod was the first product to address this change, by offering consumers a way to download and listen to some of their favorite songs. At which point, the product would become the must have item for anyone, who is wanting to: listen to and record music…
Apple I Pods Promotional Strategies. (n.d.). ICM Media. Retrieved from: http://www.icmrindia.org/casestudies/catalogue/Marketing/Apple%20iPod 's%20Promotional%20and%20Positioning%20Strategies-Marketing%20Case%20Study.htm
Apple Marketing Strategy. (2010). Vertigo Team. Retrieved from: http://www.vertygoteam.com/apple_marketing_strategy.php
Pricing Strategy. (2010). Entrepreneurship in a Box. Retrieved from: http://www.entrepreneurshipinabox.com/1268/pricing-strategy-apples-case/
Moren, D. (2007). The Many Faces of Apples Advertising. Mac World. Retrieved from: http://www.macworld.com/article/131075/2007/12/appleads.html
I email files.
The initial set up and marketing costs in starting the business will be treated as capital costs and thus, they will not be considered in the determination of the product and service price. The cost to be considered in setting price will be:
Tire Purchase cost
Cost of tire shipment
Buildings lease hold cost entailing the office and store rents,
Sales and administration personnel costs,
Future costs of marketing, advertisement and promotional activities
Cost of market evaluation exercises
Legal fees and Licenses
Materials used in service provision
Factory running costs including Electricity, heating and lighting costs
To incorporate these costs a 25% markup price will be charged on the tires' shipment and purchase cost. This percentage will suffice to cater for the business operations and overhead costs. The mark up price setting will serve for normal demand trends in ordinary…
Kotler, P. (1997). Marketing Management: Analysis Planning and Control, 9th Edition. Englewood Cliffs, NJ: Prentice-Hall.
Marn, Michael, & Rosiello, R. (2004). Managing price, gaining profit. Harvard Business Review, 8(2), 378-390.
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 confident my work ethic is strong enough and focus is definitely on the goal as well. The concern is about the pace of learning that will certainly accelerate throughout upper division courses, a point my advisors have made in discussions about the future of my talent plan. I realize I need to begin now to create the necessary foundations of alliances with professors, advisors, and upper classmen so I have a network of expert support to draw on so…
Richard L. Clarke. (2007). Price Transparency: Building Community Trust. Frontiers of Health Services Management, 23(3), 3-12.
Keesling, Garland. (1993). Brand name changes help health care providers win market recognition. Health Marketing Quarterly, 10(3,4), 41.
Arthur Meidan, Martin Peck, & Robert D. Handscombe. (2000). Marketing performance and business risk in acutecare health trusts - a new comparative approach. The Service Industries Journal, 20(3), 61-79.
Provines, C.. (2010). Overcoming organizational barriers to implementing value-based pricing in the medical devices & diagnostics industry. Journal of Medical Marketing: Special Issue: Market Access, 10(1), 37-44.
Starbuck's Pricing Strategy:
Throughout its history, Starbucks Corporation has established a reputation for having the most expensive coffee products in the marketplace. The evident premium pricing at Starbucks are combined with the premium name or brand that the organization has also developed. While the prices of Starbucks coffee products are relatively expensive, the high prices are approved by many customers in many places where the firm has its operations. Pricing act as an important aspect of Starbuck's marketing strategy because it's critical to the firm's promotion strategies and profitability. However, the company's pricing strategy is based on several aspects and decisions that help in determining its efficiency.
Pricing Decisions and Strategies:
Pricing decisions and strategies are important to a business since pricing is the only element in the marketing mix that generates revenues. Moreover, these decisions and strategies are crucial since the wrong ones can damage the firm's corporate value…
Bertini, M. & Wathieu, L. (2010, May). How to Stop Customers from Fixating on Price.
Harvard Business Review, 88(5), 84-91.
Florissen et. al. (2001, August). The Race to the Bottom. Retrieved July 11, 2012, from http://www.mckinseyquarterly.com/The_race_to_the_bottom_1078
"Pricing." (n.d.). USC Marshall. Retrieved from University of Southern California website:
____$1,700 (2) C/P
____$2,000 (2) O/P
____ ____$1,300 for two adults C/P_ ____$1,650 for two adults O/V
_$1,300 for two adults C/P_ ____$1,650 for two adults O/V
_$1,300 for two adults C/P_ ____$1,650 for two adults O/V
____$2,200 (2) C/P
____$2,850 (2) O/v
____$2,555 (2) O/V
____$1,300 for two adults C/P_ ____$1,650 for two adults O/V
This company appears to raise their fares when passengers are most likely to be vacationing -i.e. holidays, summers, etc. This is a clever and effective example of a pricing strategy to earn the most capital when passengers are immanent. Some price drops are likely to be marketed during the higher cost times in order to entice passengers to compare to what they had paid when the prices were higher.
If you have to make plans for taking…
CLIA - Cruise Lines International Association. 2007. Retrieved from the World Wide Web: http://www.cruising.org/press/overview/2.cf
Entering the Brazilian Market
Peak must decide on a pricing strategy for entering the Brazilian market. It has narrowed its options down to three: penetration pricing, skim pricing and cost-plus pricing. This report will evaluate the company, the market and each of these three options in order to determine the best choice of pricing strategy when entering the Brazilian market.
Concept/Theory: SWOT Analysis
The SWOT analysis is a tool whereby the company analyzes its internal strengths and weaknesses, and its external threats and opportunities, in order to provide some context for the decision that it is facing. The strategy that the company chooses should in some way reflect either leveraging strengths to take advantage of opportunities or to shore up weaknesses in order to defend against threats. In this case, where the company is determining a strategy for entering a new market, it will probably take into account…
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…
NetMBA.com (2010). Pricing strategy. NetMBA.com. Retrieved February 25, 2011 from http://www.netmba.com/marketing/pricing/
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
How do the sites support the positioning and pricing of the three brands?
They are dramatically different, with the Monogram site being completely separate, supporting the premium positioning. The site is done to connote the premium position and the use of these appliances in custom homes. GE Profile is more mainstream and focuses on the stylish yet utilitarian aspects of their product line. The GE site itself is more focused on functionality of products. The differences in branding and website approach in terms of positioning and pricing a significantly different and support the unique value propositions of each product series clearly and very well.
As a consumer, how do you perceive GE's appliance pricing? Is it good or fair to consumers? Are you happy with its pricing decisions?
Given how expensive it is to produce high quality appliances and the costs consumers incur when appliances aren't working correctly, I think…
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 of the product or service with the pricing strategy. Pricing is the most powerful marketing variable or strategy there is in defining a brand's value over time (Jarmon, 2009).
Analyzing the Pricing Strategies of Media Distribution and Canned Food
The pricing strategies for media distribution are significantly different than any other good as the value of the product (entertainment) has a much more rapid product lifecycle compared to durable goods or consumables. While a media distribution company…
Manu Carricano, Jean-Francois Trinquecoste, & Juan-Antonio Mondejar. (2010). The rise of the pricing function: origins and perspectives. The Journal of Product and Brand Management, 19(7), 468-476.
Alistair Davidson, & Mike Simonetto. (2005). Pricing strategy and execution: an overlooked way to increase revenues and profits. Strategy & Leadership, 33(6), 25-33.
Jarmon, R. (2009). Reputation's Effect on Pricing Power: The Importance of Strategy. Corporate Reputation Review, 12(3), 281-296.
Lieberman, W.. (2011). From yield management to price optimization: Lessons learned. Journal of Revenue and Pricing Management: Special Issue: 10th Anniversary Edition, 10(1), 40-43.
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, profit maximization, cost leadership, penetration pricing and more. Other strategies include skimming and other forms of price discrimination (NetMBA.com, 2010). For example, if Brooks Brothers priced its goods differently for different marketing channels such as the Internet or a retail channel partner like Nordstrom, this would be a form of price discrimination.
These different pricing strategies are used to achieve different objectives. For a luxury brand like Brooks Brothers, the price will support the luxury brand image. Prices therefore…
NetMBA.com (2010). Pricing strategy. NetMBA.com. Retrieved May 18, 2011 from http://www.netmba.com/marketing/pricing/
Kapferer, J. & Bastien, V. (2009). The luxury strategy: Break the rules of marketing to build luxury brands. Philadelphia: Kogan Page Ltd.
Sbordone, A. (2002). Price and unit labor costs: A new test of price stickiness. Journal of Monetary Economics. Vol. 49 (2) 265-292.
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…
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.
market structures and the pricing strategies which are specifically related to each of them. The introductory section of the paper gives an overview of the four major types of market structures and explains the main features which draw distinguishing lines between them. These major types of market structures are perfect competition, monopolistic competition, monopoly, and oligopoly. The second section discusses the pricing strategies which are used by competitors in each of these market structures in order to compete with the other competitors or operate in a profitable and competitive fashion. A case study has also been included which gives a real life example of the market structure and pricing strategies of a specific company. The paper concludes by giving summary and key findings from the whole discussion.
Introduction to Market Structures
Market structure refers to the number of competitors operating in a particular industry and the level or intensity of…
Boyes, W.J., & Melvin, M. (2012). Economics, 9th Edition. Mason, Ohio: South-Western Cengage Learning
Gitman, L.J. & McDaniel, C.D. (2009). The Future of Business: the Essentials, 4th Edition. Mason, OH: South-Western Cengage Learning
Hall, R.E., & Lieberman, M. (2010). Micro Economics: Principles and Applications, 5th Edition. Mason, OH: South-Western, Cengage Learning
Mankiw, N.G. (2011). Principles of Economics, 6th Edition. Mason, Ohio: Thomson South-Western
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 an established product. However, there is always an opportunity to adjust prices if the price of a good is not delivering the optimal financial results for the company. Thus, it requires management to have an understanding of pricing strategy in order to determine the most suitable price in the marketplace.
The most important thing to keep in mind is that price is one of the five Ps of marketing. Thus, the pricing strategy must be aligned with the other…
Kotler, P., Keller, K., Ang, S., Leong, S. & Tan, O. Marketing Management: An Asian Perspective, Sixth Edition.
NetMBA (2010). Pricing strategy. NetMBA.com. Retrieved February 25, 2016 from http://www.netmba.com/marketing/pricing/
Pricing Strategies and Decisions
Pricing Strategy Management
Pricing Policies, Processes and Methods
Policies used to manage Tesla’s pricing strategy. Currently Tesla is not only benefiting by but is actually relying on government subsidies to sell its cars. Subsidies come from electric vehicle (EV) tax credits that purchasers are able to obtain whenever they buy a Tesla. The problem is that these credits are only given to consumers for a set duration. Once the government ends the subsidy, sales drop drastically, as has been in the case in Hong Kong where tax incentives basically were the whole of Tesla’s pricing strategy—and once the tax incentives ended, sales were decimated. Currently in Norway, which is Tesla’s biggest European market, consumers pay no import tax or any of the purchase taxes that apply to non-EV cars—which is a big incentive (Tesla 10-K, 2018, p. 22). In the Netherlands, sales are soaring this year…
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 secure market share. For Tesla, which is the subject of this paper, the electric vehicle (EV) market is beginning to heat up as competitors come into the business with their own products. That means Tesla has to differentiate itself with a pricing strategy that will appeal to the biggest consumer base in the market—the average middle class consumer. In the past, Tesla has relied on the luxury brand market to drive sales—but with investors anxious for a return on…
hen expanding, the Assemblage will be more focused on setting up locations with a high amount of traffic from our target 21-35 demographic but Manhattan's density and role as an entertainment magnet allow for us to build our business.
The overall marketing objective is to build the brand and set up the expansion and penetration phase. The flagship Manhattan location supports that because of the ability and the diffusion value from visitors taking back memories of the Assemblage to their home cities, to which we will ultimately expand. On the broader level, disturbing in entertainment districts with high youth traffic will allow the Assemblage to best reach the target market. As market penetration occurs, the brand will over time become linked to entertainment and good times in a manner that is consistent across all of our markets.
Altman, H. (1987). ho's gored by gouging? Nation's Business. Retrieved May…
Altman, H. (1987). Who's gored by gouging? Nation's Business. Retrieved May 15, 2010 from http://findarticles.com/p/articles/mi_m1154/is_v75/ai_4963234/
Bovay, K. (2008). When to use a product line pricing strategy. EZine. Retrieved May 15, 2010 from http://ezinearticles.com/?When-to-Use-a-Product-Line-Pricing-Strategy&id=1341523
No author. (2010). Pricing strategies. Marketing Teacher. Retrieved May 15, 2010 from http://marketingteacher.com/Lessons/lesson_pricing.htm
The pricing of a product or service is an important aspect of the marketing mix. The pricing of a product will need to be set at a level that will support the firms' long-term profitability; even were there are short-term market penetration strategies or loss leading prices, the ultimate aim of the firm is for the generation of revenues and creation of profit. The pricing strategy chosen by a firm will depend on a number of factors; these will include the market conditions and strategies of the competing or complimentary products, as well as the level of differentiation and the market position that the firm us seeking to gain (Kotler and Keller, 2011). Two examples may be used to assess the way pricing strategies may be formulated; a media distributor and aspirin.
A media distributor, such as NetFlix or Love Film, has a limited amount…
Drury, C, (2012), Management and Cost Accounting, Cengage Learning EMEA
Hooley G; Nicouland B; Piercy, N, (2011), Marketing Strategy and Competitive Positioning, Financial Times/Prentice Hall
Kotler Philip; Keller Kevin, (2011), Marketing Management (13th Edition), Prentice Hall.
Mintzberg Henry, Ahlstrand Bruce, Lampel Joseph B. (2008), Strategy Safari: The Complete Guide Through the Wilds of Strategic Management, Financial Times / Prentice Hall
market structures in detail and analyses the pricing strategies that the firms have to undertake when they operate in different regimes. The case study on Toyota is considered next, which indicates that firms competing in various structures does not only have to focus on price and quantity ceteris paribus, they also have to consider external and internal variables that have a bearing on these decisions.
Introduction to Market Structures
Market structures are important parts of economic theory as they model market behavior that can help economists explain activities in industry with ease. Market structures, hence are basically models that define market behavior with respect to certain criteria so that it becomes simpler to compare events in real life to the postulated scenario as described in theory in order to be able to determine casualties and to define optimal strategies that firms operating in different market structures can use.
Bennett, D., Hagiwara, Y., & Kitamura, M. (2011, September 5). Toyota Bets on Japan. Bloomberg Businessweek, pp. 70-73,. Retrieved from http://web.ebscohost.com/ehost/detail?sid=fbe40510-c02e-4a4c-afc8-b21dbb1445c3%40sessionmgr11&vid=1&hid=10&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=bth&AN=60477158
Cusumano, M.A. (2011). Technology Strategy and Management Reflections on the Toyota Debacle. Communications of the ACM, 54 (1), 33-35.
John Petersen (2011). Bernstein and Ricardo Report: Cheap Will Beat Cool in Vehicle Electrification. Retrieved from http://www.altenergystocks.com/archives/2011/11/bernstein_and_ricardo_report_cheap_will_beat_cool_in_vehicle_electrification.html
Lipsey, R.G., & Chrystal, K.A. (2007). Economics. Oxford: Oxford University Press. Retrieved from http://books.google.com.pk/books?id=HgXWV8JMC10C&printsec=frontcover&dq=Economics+lipsey&hl=en&sa=X&ei=qPIuT9DdPM7wrQeQ_LzYDA&redir_esc=y#v=onepage&q=Economics%20lipsey&f=false
There are different approaches to pricing strategy. The pricing strategy should fit within the context of the overall marketing strategy. Among the different options for pricing strategy are revenue maximization, profit maximization, survival, skim pricing, and penetration pricing (NetMBA, 2010). There are also approaches such as cost-plus that take into account the company's cost structure but in a competitive marketplace it is more normal that the pricing strategy reflects what competitors are doing. For MegaWidget, the $10 price tag comes with a sales target of one million new units. The MegaWidget only costs $3 to produce, so the price is not based on the cost. It is based on penetration pricing strategy. Ten dollars is a threshold, one that consumes will notice more -- at ten dollars or less a consumer is willing to purchase the product on impulse. As a result of that, the MegaWidget should…
BEA. (2014). National income and product accounts. Bureau of Economic Analysis. Retrieved November 28, 2014 from http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm
Brookins, M. (2014). Tools used in market research. Houston Chronicle. Retrieved November 28, 2014 from http://smallbusiness.chron.com/tools-used-market-research-17205.html
MindTools. (2014). The marketing mix and the 4Ps of marketing. MindTools. Retrieved November 28, 2014 from http://www.mindtools.com/pages/article/newSTR_94.htm
NetMBA.com (2010) Pricing strategy. NetMBA.com. Retrieved November 28, 2014 from http://www.netmba.com/marketing/pricing/
While Virgin America has just begun flying in the U.S. On August 8, 2007, this last aspect of service pricing strategy is relatively new, yet the company has a very successful track record with global flights on Virgin Airways using this strategy. In summary, the three key ways in which service prices are different for consumers include the use of service pricing on the part of services providers (in this case Virgin America) to optimize pricing for given markets and audiences (charter vs. full faire), define services segmentation while underscoring their UVP, and lastly incent greater levels of loyalty over time through pricing that invites self-efficacy on the part of their customers.
Bolton, N., Myers, M (2003). Price-Based Global Market Segmentation for Services: . Journal of Marketing, 67(3), 108-128. etrieved April 43, 2008, from ABI/INFOM Global database. (Document ID: 678339141).
Docters, ., eopel, M., Sun, J., Tanny, S (2004).…
Bolton, N., Myers, M (2003). Price-Based Global Market Segmentation for Services: . Journal of Marketing, 67(3), 108-128. Retrieved April 43, 2008, from ABI/INFORM Global database. (Document ID: 678339141).
Docters, R., Reopel, M., Sun, J., Tanny, S (2004). Capturing the unique value of services: why pricing of services is different. The Journal of Business Strategy, 25(2), 23-28. Retrieved April 2, 2008, from ABI/INFORM Global database. (Document ID: 625503741).
Kim, B., Park, S (2008). Optimal pricing, EOL (end of life) warranty, and spare parts manufacturing strategy amid product transition. European Journal of Operational Research, 188(3), 723. Retrieved April 4, 2008, from ABI/INFORM Global database. (Document ID: 1426348951).
Li, M (2006). A model of pricing perishable inventories using two restrictions, with an application to airline pricing. Journal of Revenue and Pricing Management, 4(4), 329-343. Retrieved April 4, 2008, from ABI/INFORM Global database. (Document ID: 1025479531).
JC Penney's New Pricing Strategy
J.C. Penney was founded in 1902 by James Cash Penney, and by 1907 he had purchased full interest in three locations, moving his company headquarters from Wyoming to Salt Lake City in 1909. By 1912, there were 34 stores in the ocky Mountain State areas. By 1928 Penny's had opened 1000 stores and by 1941 had 1600 stores in all 48 states. Penny's began national advertising in 1956, offered in-store credit cards in 1959, and acquired The Treasury discount stores in 1962. By 1963 it issued its first catalog, expanded to Alaska and Hawaii, acquired Thrift Drug and by 1969 was a major feature in most American cities. By James Penney's death in 1971, the company had revenues of over $5 billion and peaked with 2,053 stores in 1973 jcpenney.com; Mattioli, 2012).
etailing in the 21st century demands far different strategies than ever before. etailing…
D'Innocenzio, A. (January 27, 2012). J.S. Penney Slashing Prices on All Merchandise. USA
Today. Retrieved from: http://www.usatoday.com/money/industries/retail/story/2012-01-25/penneys-price-overhaul/52787388/1
Girard, K. (March 5, 2012). Is JC Penney's Makeover the Future of Retailing? Working Knowledge -- The Harvard Business School. Retrieved from: http://hbswk.hbs.edu/item/6944.html
The company was in a difficult position during the previous year, losing significantly to discounter Target or to Wal-Mart and it even had to announce that it may leave the toy industry if things are not likely to improve during the next period of time. In order to "thin inventory," the company came up with heavy discount policies and gift cards to increase the volume of sales.
According to Dhruv Grewal, professor of marketing and retail at abson College, "it's time for Toys R Us to think outside the box." ut analysts say that Toys R Us may need more ideas, such as unique gift card options and co-op branding with other retailers to survive
Another type of policy used by toy retailers is to expand the categories so that people buy at one time, including books, music, video games and DVDs (as an advantageous package). This type of policy…
Wal-Mart doesn't plan to toy much with prices" http://www.usatoday.com/money/industries/retail/2004-10-11-toy-2004_x.htm
Grant, Lorrie. Wal-Mart doesn't plan to toy much with prices. On the Internet at www.usatoday.com/money/industries/retail/2004-10-11-toy-2004_x.htm.Last retrieved October 20
The ability to create a makeup palate that is suited to the consumer's specific beauty needs, to create a unique image of beauty that is healthy and an enhancement of one's natural beauty should be the focus of a redesigned Avon site.
Avon is a classic product in the United States -- someone in 'your' family may have sold Avon, long ago. Although door-to-door sales is no longer lucrative, and unlikely to be accepted in China for higher-end goods, selling the midpriced Avon in Chinese department stores is an ideal way to create a humanized brand image for Avon and to capitalize upon the mania for customization and goods tailored to 'your needs.' This is one way to use American individualism yet give it a Chinese spin by stressing the need for make up to suit one's skin tone and enhance but not alter one's appearance. The company website…
Avon brands. (2009). Avon. Website. Retrieved August 15, 2009 at http://www.avoncompany.com/brands/color.html
Avon China. (2009). Avon Website. Retrieved August 15, 2009 at http://www.avon.com.cn/PRSuite/home_page.page
Avon product history. (2009). essortment. Retrieved August 15, 2009 at http://www.essortment.com/all/avonproductshi_risn.htm
Changing Chinese buying habits. (2008, February 20). Export News. Retrieved August 15, 2009
Saturn's Pricing Strategy
The Unique Project - Saturn
The Saturn Project was an experiment by General Motors to stop the heavy loss in terms of sales that GM was undergoing to the Japanese car manufacturers. This was an attempt to manufacture and market cars in a way different from the traditional methods of GM. This was the reason that GM did not set up the Saturn Project as a division of GM like Chevrolet or uick. Saturn was set up as an independent company. To make sure of the complete change in thinking even in manufacturing, GM shifted the factory for production from traditional Detroit to Spring Hill in Tennessee. Since the competition was to be specifically with Japanese cars, the manufacturing technology was also made to the best international standards available then. (Avertising Age, May 5, 1997, p. 30)
To get the necessary support from the workers, the company…
Ferrell, O.C. "Saturn," in O.C. Ferrell, Michael D. Hartline, George H. Lucas, Jr., and David Luck, Marketing Strategy, Ft. Worth, TX: Dryden Press, 1999, pp. 187-193
Road Hazard," Advertising Age, May 5, 1997, p. 30
Koenders, J. Chris. Achieving Customer Satisfaction Through Distribution Partners: The Case of Saturn BMW, Munich, Wujin Chu, Seoul National University, May 1994 retrieved at http://www.centerworld.net/prof/wchu/product/classdata/SATURN.html. On 07/24/2003
Saturn Cars: Saturn Prices ION to Attract Young Buyers, September 17, 2002 retrieved at http://www.saturnfans.com/Cars/ION/2003/2003ionpricing.shtml . On 07/24/2003
The pricing strategy for Big Mabel's Chicken and Waffles will be in line with other similar businesses. Though food trucks are able to deliver meals quickly, they compete more with casual dining or even fine dining restaurants in terms of their market. The pricing, therefore, does not compete with quick service restaurants. The pricing strategy therefore will reflect a few different objectives. The operating hours are limited, so it is important to drive volume. For many customers, this might be an impulse purchase, as the lack of fixed location makes it more difficult for customers to target Big Mabel's as a destination. So the pricing strategy has to be volume-friendly. Typically in the restaurant business, 3x ingredient cost is common. For a food truck, 2.5x is probably fine as a starting point, subject to adjustment on the basis of prevailing demand conditions.
There will not be any specials, with…
dynamic nature of the current business environment, identifying and implementing an efficient pricing strategy is one of the most critical decisions that an organization has to make when launching a new product. This was the case for Dropbox, Inc. back in 2007, when the founders, Drew Houston and Arash Ferdowsi, introduced their product in the market. According to Dropbox (2015) the idea for their business came about after Houston forgot to carry the US drive that would transfer files from one device to another. That, together with the fact that he constantly had to email himself files when he needed to work from more than one computer, necessitated the invention of a file hosting service that provided users with remote storage over the internet. However, the pricing strategy posed a problem particularly because consumers were not accustomed to cloud storage services and they could not figure out a way to…
Dropbox, Inc. 2015. About Us. [online]. Available at https://www.dropbox.com / [Accessed 21 April 2015].
Seufert, E.B., 2014. Freemium Economics: Leveraging Analytics and User Segmentation to Drive Revenue. Waltham, M: Elsevier, Inc.
Teixeira, T., and Watkins, E.A., 2014. Freemium Pricing at Dropbox. Harvard Business School Library. Available at http://www.hbs.edu/faculty/Pages/item.aspx?num=45910 [Accessed 21 April 2015].
Non-Price Barriers to Entry
In the OEM business, ongoing contracts are a strong driver of future sales. Once Larson becomes the battery supplier for a company, it can build a strong relationship with that company. The result will be a non-price barrier to entry as smaller firms find it difficult to break the relationships that Larson forms with its customers. ithout those customers, there will be less room for growth and for market entry for smaller and newer competitors.
Product Differentiation Recommendations
Pursuing a differentiated strategy for Larson would require that the company actually be able to make the best batteries, which would require significant R&D investment. The company can certainly take steps to improve its branding, as that will not cost much compared with their total product expenditures. However, the best way for Larson to differentiate its batteries is through a cost leadership strategy. Larson's customers are price sensitive…
McCain, R. (no date). Monopolistic competition. Drexel University. Retrieved May 10, 2010 from http://faculty.lebow.drexel.edu/McCainR//top/Prin/txt/Imch/MC1.html
QuickMBA, adapting Porter, M. (2007). Porter's five forces. QuickMBA.com. Retrieved May 10, 2010 from http://www.quickmba.com/strategy/porter.shtml
Stephon Marbury's pricing strategy to endorse a signature sneaker for $0.98 only demonstrates his objective for his brand to become the "cost leader" among sneaker products in the market. As a cost leader, Marbury's sneaker brand aims to appeal to a broader set of markets, offering them a sneaker collection that is similar to style, design and function as other leading brands in the market -- only, Marbury's sneaker collection, Starbury, is sold at a cheaper price than these leading brands.
The Starbury brand's positioning in the market reflects its pricing strategy. It appeals to a broader consumer group, which means Marbury's sneakers target a broad range of consumer groups. Starbury's customers range from young adults to adults. In addition, the inclusion of a clothing apparel line shows that the brand tries to be a 'lifestyle' brand to its target markets. As a result of its broad scope…
Barney, J. 2005. Strategic Management and Competitive Advantage: Concepts and Cases. NY: Prentice Hall.
JC Penney is a major department store, doing billions of dollars in revenue per year. The industry, however, is mature and some would say stale. Younger consumers in particular are not attracted to the department store shopping experience, instead choosing anything but. JC Penney tapped former Apple executive on Johnson as its new CEO, and made big changes to its merchandising and especially to its pricing. One pricing strategy that Johnson instituted was to eliminate the traditional JC Penney sales and opt for lower prices across the board (D'Innocenzo, 2012). Analysts from his alma mater Harvard Business School lauded him as a genius for the simplified pricing program (Girard, 2012). Yet, Johnson couldn't wrap his head around the fact that the key purchase drivers in department store sales are nothing like the purchase drivers in consumer electronics, and the pricing strategy did not go nearly as well as planned.…
Berfield, S. & Maheshwari, S. (2012). JC Penney CEO Ron Johnson gets lesson in pricing. SF Gate. Retrieved April 19, 2014 from http://www.sfgate.com/business/article/J-C-Penney-CEO-Ron-Johnson-gets-lesson-in-pricing-3589014.php
D'Innocenzo, A.(2012). JC Penney slashing prices on all merchandise. USA Today. Retrieved April 19, 2014 from http://usatoday30.usatoday.com/money/industries/retail/story/2012-01-25/penneys-price-overhaul/52787388/1
Girard, K. (2012). Is JC Penney's makeover the future of retailing? Harvard Business School. Retrieved April 19, 2014 from http://hbswk.hbs.edu/item/6944.html
Passikoff, R. (2013). Ron Johnson ousted as JC Penney CEO. Forbes. Retrieved April 19, 2014 from http://www.forbes.com/sites/marketshare/2013/04/09/ron-johnson-ousted-as-jcpenney-ceo/
The two stores whose pricing strategy has been looked at here are GIM Computers and Ginstar Computers, both located Downtown Atlanta, with the varying prices for their computer related products. The computer related products were picked for this case study since their specifications are easier to match to the last detail hence an easier comparison of the prices.
The five products selected are Seagate 1TB hard disk,
GIM Computers price ($)
Ginstar Computers price ($)
Seagate 1TB hard disk
Internal Floppy drive
External Floppy drive
Microsoft windows 7 professional
GIM Computers.com and Ginstar Computers Inc. website.
From the pricing trend seen above, it is apparent that the two businesses are engage in the customer-based pricing strategy. They have the customer needs and way of thinking in mind and specifically employs the psychological pricing as a sub-set of customer-based pricing strategy. This is bearing the unusual…
Ginstar Computers Inc., (2012). Storewide Holiday Sale. Retrieved November 7, 2012 from http://www.ginstar.com/home.aspx
GIM Computers, (2012). Welcome To GIM Computers. Retrieved November 7, 2012 from http://new.gimcomputers.com/index.php
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
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.
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
" Green stated loss leaders in particular have a drastic effect on those brands that are deeply discounted in the process. According to Green, when consumers see such deep discounts on specific toy items, there is an assumption that such toys are "fads," or popular only in the short-term. Particularly, if other retailers respond to such deep pricing gashes, as did many retail toy outlets in response to Wal-Mart in 2003, this image of a temporary toy fad is increased. According to Green, such actions can actually cause a toy to 'die,' or become less popular, resulting in less sales for the toy manufacturer (Hotten, 47).
However, such critics fail to note the less partisan view of Wal-Mart's actions, which note the place of such actions in the global capitalist economy (Lohr, C5). As obert B. eich, former labor secretary, noted, Wal-Mart's actions and dealings in business represent the true…
Fox, Mark A. "Market Power in Retailing: The Case of Wal-Mart." Popular Music and Society 28.4 (2005): 501-505.
Gillooley, David. Retail Product Management: Buying and Merchandising. London: Routledge, 2001.
Grant, Lorrie. "Wal-Mart Doesn't Plan to Toy Much With Prices." USA Today 11 Oct. 2004: B8.
Hotten, Russel. "Tough Game for the Big Players in Toys." The Evening Standard 17 Dec. 2004: 46.
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…
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.
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…
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
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…
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.
Pricing the Kindle Fire
The Kindle Fire, priced at $199, is just 39% of the price of it's most well-entrenched and popular competitor the Apple iPad2, which sells for $499. Amazon has pursued a market penetration strategy with this product, looking to create a content consumption platform for the future. Apple argues that the iPad2 is a content creation and consumption platform. The price differential of $300 is steep to pay for content creation capability, which is one of the factors in Amazon being so successful with its pricing strategy. Apple could further refine this pricing strategy however and further expand the market.
Defining Kindle Fire Pricing Strategy
The initial pricing elasticity of products that have a high degree of innovation associated with them tend to be more unitary or highly elastic, as demand often outstrips supply of these types of devices (Antonelli, 1989). This factor in pricing often leads…
Antonelli, C. (1989). The diffusion of information technology and the demand for telecommunication services. Telecommunications Policy, 13(3), 255-255.
Dong-Qing, Y., & Liu, J.J. (2005). Competitive pricing of mixed retail and e-tail distribution channels. Omega, 33(3), 235-247.
Dudick, T.S. (1989). Pricing strategies for manufacturers. Strategic Finance, 71(5), 30-30.
Neelamegham, R., & Chintagunta, P.K. (2004). Modeling and forecasting the sales of technology products. Quantitative Marketing and Economics, 2(3), 195-195.
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.…
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.
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…
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.
Small Business Growth
Achieving the desired organizational growth is a dream most organizations aspire to realize. Organizational growth entails an increase in the total productivity, sustainability, and competitiveness in the marketplace. Organizational behaviors such as the adoption of the desired culture, leadership style, and effective management of the employees ensure the realization of the desired organizational growth. However, environmental factors such as the adoption of the new technology, constantly changing consumer demands, and stiff competition make the realization process a challenge. Despite these, adoption of the most effective interventions often enables organizations to achieve their objectives (Neale & McElroy, 2004). Therefore, this research paper analyzes a case that involves a small business owner (Kelly) who plans to expand her business.
Kelly should take some steps while organizing and prioritizing her business growth strategies. Mrs. Kelly should consider involving the employees of her business in the planning and prioritization of…
Arriola, L.R. (2012). Multi-ethnic coalitions in Africa: Business financing of opposition election campaigns. New York: Cambridge University Press.
Cinnamon, R., & Helweg-Larsen, B. (2006). How to understand business finance. London: Kogan Page.
Dlabay, L.R., & Burrow, J. (2007). Business finance. Mason, Ohio: South-Western.
Neale, B., & McElroy, T. (2004). Business finance: A value-based approach. Harlow [u.a.: Prentice Hall.
Walt Disney's Marketing Mix/Strategies
Product and Service Strategy
The products offered by Walt Disney are much more tangible and services. These products have offered Walt Disney high awareness among many customers in the market. The products are designed to meet the specific needs and preferences of the customers in the diverse market. Walt Disney has gone ahead to customize all of its products under certain characteristics of the company. These characteristics help to differentiate and demarcate its products from those of other brands in the market (Deodhar, 2013).
Prices of goods and services offered by Walt Disney are not low. Nonetheless, when one makes a comparison of the prices of products and services of Walt Disney and those of other competitor brands, he or she will realize that the prices are fair, with consideration of the quality and quantity of the products produced by Walt Disney. Pricing is…
Deodhar, S. Y. (2013). Why I Am Paying More: Price Theory and Market Structure Made Simple. University Press,
Hubbard, R G, and Anthony P. O. (2006). Microeconomics. Upper Saddle River, NJ: Pearson/Prentice Hall, 2006. Print.
McDaniel, C., D, Joseph F. H, and Charles L. (2014). Marketing 8. Harvard .University Press,
Salinger, Bob, & Len Testa. (2011). The Unofficial Guide to Walt Disney World 2011. New York: New York Press
AMAZON'S AND WAL-MAT'S DISTIBUTION CHANNELS
Understanding Amazon's and Wal-Mart's Distribution Channels
It is common knowledge that a change in the business strategy has a serious implication on the performance and success of a company in any industry. For example, Amazon Company is popular for the sophisticated e-commerce and most of its customers shop their products from the company online. However, if the company creates many stores in the different parts of the world to improve the speed of service delivery, its sales volumes will have negligible changes. Wal-Mart is the largest retailer, and it has many stores in different countries (Nardini & Abbott 2001. If Wal-Mart resolves to invest in e-commerce, the company will experience changes in sales volumes.
The resolution by both the Amazon and Wal-Mart to improve on the distribution channels has different implications on the business practices. Notably, the Wal-Mart has already established the stores in different…
Amit, R., & Zott, C. (2012). Creating Value through Business Model Innovation. MIT Sloan Management Review, 53(3), 41-49
Nardini, B., & Abbott, J. (2001). Issues in Vendor/Library Relations-Will Amazon Wal-Mart the Book Vendors? Against The Grain, 13(1), Article 27: 72-74
Company International Expansion
Potential Countries for Expansion
Country for Expansion
Potential Countries for Expansion
In this case, we will discuss the potential for the expansion of XYZ company, based in the U.S., to another country for business. At the beginning, we choose three possible countries where the business can set up expansion projects and then compare the various business, economic, political and legal aspects to choose the best destination for expansion. In the second part, we would also weight the possible modes of market entry and subsequent expansion. For the first part, we choose three potential countries for expansion -- Canada, the United Kingdom, and China.
There has been a modest growth in the overall apparel market since the dollar value was unfavorable and the market was affected by retail competition. Expanding online options also gave rise to price wars. There has been…
Euromonitor.com. (2016). Apparel and Footwear in Canada. [online] Available at: http://www.euromonitor.com/apparel-and-footwear-in-canada/report [Accessed 11 Mar. 2016].
Euromonitor.com. (2016). Apparel and Footwear in China. [online] Available at: http://www.euromonitor.com/apparel-and-footwear-in-china/report [Accessed 11 Mar. 2016].
Retail sales value monthly in textile, c. (2016). Clothing retail store sales value Great Britain 2013-2015 -- Statistic. [online] Statista. Available at: http://www.statista.com/statistics/288014/retail-sales-value-monthly-for-clothing-footwear-textile-stores-great-britain / [Accessed 11 Mar. 2016].
Sun, B. (2010). Concerns of Enterprises' Expansion. IJBA, 1(1).
Price eduction Strategy
What are the implications for revenue and profits of implementing the price cut?
The implications for revenue and profits are dependent on the demands and supply of the product. If there is not enough demand for the product, a reduction in the price of the product by 10% is unlikely to boost the demand of the product. On the other hand, if there is sufficient demand of the product, a 10% reduction in the price of the product will have direct effect on the revenue and profits of the company. The reasoning behind is that the price elasticity of the product is 2.5%, higher than 1. Therefore, a reduction of 10% in the price will have about 2.5 times effect in the demand of the product. As far as meeting the target by the marketing managers, the managers would find it easier to meet its…
Kotler, P. (1991). Marketing Management. New Jersey: Prentice Hall.
McConnell, B. (2001). Economics-Principles, Problems and Polices. New York: McGraw-Hill.
This discussion continues with the analysis of how Module Price adjustments impact the total profits and market share of SunPower vis-à-vis industry-wide performance. Further, the discussion highlights how improvements in processes yield unit costs reduction. Like was the case with the previous exercise (SLP1), four major decision points will be taken into consideration in the current exercise, i.e. SLP2. A more conservative pricing approach will, however, be adopted in SLP2.
Decision 1: Beginning of Year 1: 2007 (See Appendix 1)
SLP1 Module Price: $0.15
SLP2 Module Price: $0.13
It is important to note, from the onset, that in SLP2, SunPower starts off with a more significant share of the market at a lower price level than that adopted in SLP1. In SLP2, the market share is 4.85%, which is essentially 2.45 percentage points better than the market share in SLP1. The annual revenue is also markedly high at…
Home Depot is a "category killer" retailer, selling supplies for home and garden. Home Depot operates with a cost leadership strategy, as it seeks to use its buying power in particular to offer customers a low price. Home Depot also incorporates a service element to its business model, something it hopes will give it a competitive advantage. Home Depot is currently undergoing a change in terms of its structure and culture, and this has caused some disruption. That said, Home Depot is the second-largest retailer in America behind Wal-Mart and has experienced strong sales improvements during the Nardelli years.
The competitive situation is intense. Home Depot is a dominant competitor in the industry, but faces strong competition from Lowe's, which is almost the same size. These two competitors operate as something of a duopoly, although in other businesses there are specialist firms that are strong competitors.…
In any market, there is bound to be a strategy that is used to decide on the prices that the commodities or the services that the potential clients will be in need of. Since the goods or the services availed are always targeted at making a profit at the end o the day, pricing is one of the most fundamental focuses that the entrepreneurs have to keenly look at in order to strike a balance between making profit and retaining clients for the item offered.
In the case scenario below, the pricing methods that should b used in determining the prices of canned vegetables and Aspirin are looked at, the various methods that can be used and how different the pricing methods are as well discussed.
Pricing method for canned vegetables
Taking into account that almost each food outlet has canned vegetables, with several alternatives floated by each…
Scott Allen, (2012). Pricing Methods: Four Models for calculating your Pricing. Retrieved November 27, 2012 from http://entrepreneurs.about.com/od/salesmarketing/a/pricingstrategy_2.htm
Commonwealth of Australia, (2009). Policies, Procedures and Methods Used in the Recommendations for Pricing of Pharmaceutical Products 2009. Retrieved November 27, 2012 from http://www.health.gov.au/internet/publications/publishing.nsf/Content/health-pbs-pbpa-pricing-policiesdoc~pricing-methods
Just as Sarbanes-Oxley legislation created significant opportunities for management consultancies, the same holds true for sustainability requirements in European nations.
In conclusion, all management consultancies are attempting to position themselves as trusted advisors to firms looking to stabilizing existing sales while growing into emerging markets. Of the five included in this analysis, all also have social media channels that are well-populated with content meant to convey their thought leadership in specific areas as well. Yet in the area of equating strategies to IT investments, the majority take the approach that more IT spending is potentially the path out of strategies not performing well. Only the Boston Consulting Group takes a more strategic view of systematic change to businesses, choosing to layer in TI after the frameworks have been created. Their legacy strengths in the BCG and Growth/Share Matrices could be the impetus for this approach. Despite that fact, Boston Consulting…
Greiner, L., Motamedi, K., & Jamieson, D.. (2011). New consultant roles and processes in a 24/7 world. Organizational Dynamics, 40(3), 165.
Mors, M.. (2010). Innovation in a global consulting firm: when the problem is too much diversity. Strategic Management Journal, 31(8), 841.
Klaasjan Visscher, & J. Irene A Visscher-Voerman. (2010). Organizational design approaches in management consulting. Management Decision, 48(5), 713-731.
Strategy & Decision Making
Wal-Mart has become a global corporation. The company's primary vision focuses on a more global presence and promotion of the organization's ethical culture across global stakeholders. The company's concept of a vision statement focusing on a culture of ethics is vital in globalization. The company has embraced diversity and culture in their global operations thus leading to a competitive advantage and good reputation. By promoting a culture of ethics, Sam Walton has assisted stakeholders and customers to make informed decisions thus doing the right thing (Griffin, 2012).
Wal-Mart's mission statement focuses on quality customer service, striving for excellence and respect for individuals. Therefore, based on their core beliefs and values, the mission of the company emphasizes on the provision of daily low prices and exceptional services to customers. The company has managed to uphold their business for long because the top executives and managers work…
Griffin, R.W. (2012). Fundamentals of management. Mason, OH: South-Western Cengage
Hitt, M.A., Ireland, R.D., & Hoskisson, R.E. (2009). Strategic management: Competitiveness and globalization. Mason, OH: South-Western
Husted, B., & Allen, D.B. (2011). Corporate social strategy: Stakeholder engagement and competitive advantage. Cambridge, UK: Cambridge University Press
These new customers of the optimal industry are looking for their own long-term competitive advantage through better alignment and direction of their own resources.
Differences between competitors are significant and aligned more on quality and customization of products than on price or aggressive discounting and the use of promotions. As a result, price elasticity is a permanent factor of the market and also signals the use of more effective means of differentiation, including the delivery of exceptional levels of service and greater levels of product customization expertise.
In the optimal industry there are also an abundance of suppliers, each with highly differentiated and highly efficient supply chains of their own, all ensuring perfectly filled orders. The supply chain then is the greatest competitive differentiator of the industry from the manufacturing and fulfillment perspective.
The highly unique approach to service that is provided by suppliers also focuses on the…
Porter (1990) - Competitive Advantage of Nations. Harvard Business Review. March, April, 1990 Edition of Harvard Business Review. Dr. Michael Porter.
Porters' Five Forces Model
Distribution Channel Analysis Identifying Wholesalers, Distributors, Retailers, and e-Commerce
ingle or multiple channels of distribution can be utilized including the direct channel of the Internet using the company's e-Commerce website as well as the direct channel of sales teams. Multiple teams that specialize in different products of customer segments may also be utilized. Direct channels include catalogue sales and retail sales as well as the use of a wholesaler or distributor, which is described as a company "that buys products in bulk from many manufacturers and then resells in smaller volumes to retailers. The Value-Added reseller will work with end-users to make provision of custom solutions that including "multiple products and services from different manufacturers." (VanAucken, 2013) a consultant can be used to develop relationshi8ps with companies and make provision of various services types. A dealer may purchase inventory from a manufacturer or distributor and then resell is to an…
Cooper, L. (2013) Five Strategies for a Successful Global Brand. 1 Jul 2010, Marketing Week. Retrieved from: http://www.marketingweek.co.uk/five-strategies-for-a-successful-global-brand/3015220.article
VanAuken, B. (2013) Building a Global Brand. Brand Strategy Insider. Retrieved from: http://www.brandingstrategyinsider.com/2007/01/building_a_glob.html#.UZq2RaLMDHR
oyal line clothing Marketing Plan
oyal line clothing is a company that undertaking production and distribution of casual clothing for both men and women. The company's clothing lineup is ideal for individuals with a passion for outdoor activity as well as those aspiring to embrace this type of life style. Manufacture of the clothing lineup is undertaken in such a way to afford the users a feel for their love and passion for outdoor activities. This is by making logos on the clothing for different sporting and outdoor activities. This labeling creates an opportunity for royal line clothing to capture interest of many outdoor enthusiasts thus widening the potential customer base.
oyal line clothing understands that casual clothing line up needs to deliver to the potential and existing clientele a feel of the outdoors. This is achieved by picking colors for the clothing closely related to nature. The…
Fleisher, C.S., & Bensoussan, B.E. (2007). Business and Competitive Analysis Methods: Effective Application of New and Classic Methods. Upper Saddle River, NJ: Financial Times Prentice Hall.
Gibson, & Eric. (2006). Sell What You Sow. The Grower's Guide to Successful Produce Marketing. Auburn, CA: New World Publishing.
Kotler, P. (2000). Marketing Management Analysis, Planning, Implementation and control. New Jersey:: Prentice Hall.
Competing in today's economy, demands that a business find ways to break out a commodity status to meet customer needs more than competing firms do. A sound marketing strategy requires effective planning; this helps a business to capitalize the opportunities present in the market and leverage their strengths. Service businesses and firms encounter a number of unique cost considerations that need to be addressed when formulating service pricing strategy. Service pricing is not often finalized until after provision of the service; hence the consumer faces a lot of price uncertainty. Product line pricing tends to be more complicated. The opportunity for illegal pricing is greater in services than in goods.
The overall profitability of a business can be assed by examining change and firm or business profitability. An enterprise gross margin can be used to measure the contribution of the enterprise to a business. The sum of business…
Ferell, O.M. (2010). Marketing Strategy. Atlanta: Cengage.
LUIS, E.D. (2011). Contemporary Business. New York: Wiley and Sons.
There are a number of different approaches to the issue of preliminary pricing, and which one the company chooses depends on the strategy that the firm has. Some of the different strategic options include maximizing profit, maximize volume, maximize margin, cost recovery and survival. Preliminary pricing strategies usually fall into two types. The first is to maximize volume. This strategy is known as penetration pricing, and holds that the company should set prices below the existing competitors in the market in order to build market share rapidly. The company may even take a loss on this type of pricing until it is able to build economies of scale in production.
The other strategic option is to establish the product as a premium offering. The cookies at Cookie Craze are the best cookies anybody on planet Earth has ever tasted, and as such cannot be given away…
NetMBA. (2010). Pricing strategies. NetMBA.com. Retrieved March 30, 2012 from http://www.netmba.com/marketing/pricing/
From this standpoint, Sony was successful in using pricing as a significant messaging part of their product mix.
When analyzing the pricing strategies Sony has relied on since the introduction of the PSP3 globally, the observations of Porter (1999) on the implications of price as competitive advantage within his Determinants of National Competitive Advantage (sometimes called the Porter Diamond) illustrates how Sony is using price to attempt to create equilibrium across Factor Conditions and Demand Conditions (pg. 78). The approach Sony takes to first ascertain the demand curve by geography first, and second, to create unique and differentiated market positions second, align with the approach Porter (1999) advocates in using as he calls it, the Diamond of National Advantage" to attain demand equilibrium and in balance. Porter advocates innovation and human productivity as the two most potent differentiation strategies for entire industries and their strongest industries, hence the title of…
CRM Buyer (2005) - Searching for Blue Ocean Strategies. Louis Columbus. CRMBuyer.com. September 23, 2005. Accessed from the Internet on October 29, 2007 from location: http://www.crmbuyer.com/story/46292.html
Kotler, P, & Keller, K (2006). A Framework for Marketing Management.Upper Saddle River: Pearson Prentice Hall. Pages 217-236.
McKinsey (2003) - Marn, Michael; Roegner, Eric; Zawada, Craig. "The Power of Pricing," 2003 Number 1. Boston, MA McKinsey Quarterly. Pages 27-36.
Porter, Michael (1999) "The Competitive Advantage of Nations" March - April, 1999. Boston, MA. Harvard Business Review. Page 73-91.
Thus, all content will be designed to avoid such data collection (no signups or memberships, for example) (Aftab, 2005).
The company will also engage in a public relations strategy. The company will actively seek appearances on talk shows and other media to spread the word about our new squeezable colored peanut butter. The public relations program will emphasize the dual messages of fun and nutrition with which we want to associate ow Butter. The public relations program will largely be targeted during the launch -- by the end of the calendar year (four months after the school year has begun) the public relations program will draw to a close.
Direct marketing and personal selling will be focused on the school lunch program administrators. At first, this element of the marketing program will be focused on direct marketing rather than personal selling. The cost of maintaining a traveling sales force is…
NetMBA.com. (2007). Pricing strategy. NetMBA.com. Retrieved May 25, 2010 from http://www.netmba.com/marketing/pricing/
Bovay, K. (2008). When to use a product line pricing strategy. EZine Articles. Retrieved May 25, 2010 from http://ezinearticles.com/?When-to-Use-a-Product-Line-Pricing-Strategy&id=1341523
Aftab, P. (2005). The Children's Online Privacy Protection Act of 1998 (COPPA). Aftab.com. Retrieved May 25, 2010 from http://www.aftab.com/coppainanutshell.htm
Infotrends.com (2010). Distribution strategies. Infotrends.com. Retrieved May 25, 2010 from http://www.capv.com/public/Content/MRD/Projectdescriptions/distributionstrategies.html