Week 1 Discussion 1
“Pricing Strategies” Please respond to the following:
- Identify one product that would benefit from each of these three pricing strategies, and one product that would not benefit from each pricing strategy (cost-plus, customer-driven, and share-driven). State your rationale for each selection.
AND REspond TO THIS POST:
RE: Week 1 Discussion 1
Hello Professor and Classmates,
I am going to be the first to take a stab at this for week 1 discussion.
Cost-plus pricing: Is a strategy for which retailers, construction companies, and some repair shops greatly benefit from as an assumption of making a profit. The cost-plus strategy is unquestionably the most uncomplicated and generally straight forward method for deciding cost. Notwithstanding, it may not be the most exact. It is maybe best taken a gander at as a beginning stage, from which the last cost can be characterized. Adversaries of the technique would contend that not all expenses are fixed. An all the more glaring drawback, however, is that this methodology may not mirror the genuine estimation of the item.
Customer driven pricing: This strategy of pricing is where the seller makes the decision based on what the consumer justify what they will pay. B2B (Business to Business) sales for which allows marketing and sales to collect information on its customer value. A product that benefits from Customer-driven pricing would be Consulting firms. Expecting the last item or experience is adequate; the client feels in complete control of the buy and, in any event to some extent, is answerable for their own fulfillment. Airlines are less likely to benefit from Customer-driven pricing, due to the outrageous fees that cannot be negotiated or drive the cost no matter what.
Share driven pricing: This strategy is strictly dictated by competitive conditions. Meaning a company way to stay competitive in their industry over their opposition, this empowers the company to settle on moderately simple valuing choices. Small items/sales benefit the most from this strategy because this strategy allows them to compete on a lower scale. For example, if a small business such as GovSmart, a value-added reseller (VAR), increases their cost on a software license by $32, then MA Federal the same VAR will also increase their cost. High end or products will not benefit from this strategy due to the fact their cost/pricing has already defined as a higher price or cost.