Pricing Essay Example | Topics and Well Written Essays - 1250 words

Pricing - Essay ExampleCenter of discussion in this paper is determine that hatful be approached at three distinct levels such as industry level, mart level, and transaction level. application level determine process considers overall stintings of the industry including changes in customer needs and supplier prices. Zuponcic states that Market level determine takes into account market trends and competitors strategies whereas, transaction level pricing specifically focuses on the discounts management. Modern marketers practice a range of pricing strategies mainly including cost plus pricing, skimming pricing, market oriented pricing, penetration pricing, premium pricing, price leadership, target pricing, absorption pricing, and value based pricing. A readiness of economic factors is to be considered before recommending a pricing strategy for a particular product since pricing is the most effective profit lever. As Sloman points out, it is necessary to evaluate market penury a nd price snapshot of the product. For instance, if there is high market affect for a product, the marketer can fix a comparatively higher price whereas he will be forced to down in the mouther product prices when market demand declines. Some products including jewelleries and automobiles are very sensitive to price and hence, even a small increase in price will lead to a noticeable decline in their market demand. As Clausen indicates, economic theories do not encourage the setting of higher prices for such price sensitive products. In addition, yield costs and expected profit margin have to be analyzed term choosing a pricing strategy.... In addition, production costs and expected profit margin have to be analyzed while choosing a pricing strategy (ibid). When a products cost of production is high, firms generally rosiness higher prices in order to ensure adequate return on the huge investments. In the beguile of Senior (1852, p. 102), organizations need to consider huge profi t margins if the cost production is high and fix a low profit margin if production costs incurred are near to the ground. Shaw (2001, pp.58-59) points out that market coordinate also plays a crucial role in ensuring successful pricing since market demand is the get a line driver behind product movement. To illustrate, a skimming pricing policy would probably fail to decoy customers in a market where competition is intense, because a set of other product choices are uncommitted to customers. Therefore, it is better to adopt a cost plus pricing policy or penetration pricing policy while operating in a highly competitive market environment. Similarly, price contrast strategy would be advisable in a market which contains diverse population. This strategy seems to be authorization for mobile phone industry, particularly to Aslan. According to George, Joll, and Lynk (1992, pp.181-185), in an oligopolistic market environment, a small number of sellers miss the market and hence econo mic theories advise firms to compete in such market segments with relatively low prices and high production. If a marketer increases his product prices in an oligopolistic market environment, customers will certainly switch their demand to other sellers who market their products more affordably. Marketers must give specific focus on the pricing of plain configurable products. Economic approaches direct that price