Essay about Dhl Pricing Strategy

Because of the fewness of companies in this type of industry, which is typical of an oligopoly; they get to make their price. In the USA, the auto companies certainly do make their own price.

The price ceiling is the maximum price a seller is allowed to charge for a product or service. An impact on society includes when the prices are so high of a product, that no one can buy it. A price floor is the lowest legal price a product or service can be sold at. When market price is at its lowest, it may still be too high for consumers to purchase products. Governments can intervene for any purpose, and they are the ones who set these price controls.

The Internet backbone is made of networks managed by a host of companies including Level3, MCI, and Qwest. The broadband service provides are Verizon, AT&T, and Comcast.(Robert Hahn and Scott Wallsten) Providers that carry approximately equal traffic.(Robert Hahn and Scott Wallsten) To conclude, broadband service pricing also is currently unregulated. Broadband providers must charge consumers a specific a price of zero and charge users only in certain ways.(Robert Hahn and Scott Wallsten) Knowing this, companies like Verizon, AT&T, and Comcast are wanting to charge extra just for using their

Eurotunnel should use a market-penetration pricing strategy at all times to gain freight customers. It should use a market-penetration pricing strategy during non-peak periods and a premium pricing strategy during peak periods with passenger car customers.

8. Threat of New Entrants: “There are a number of low-cost carriers (LCCs) in the domestic market and the Company competes with LCCs over a very large part of its network.”

Moving on towards the various pricing strategies, the first pricing strategy is the differential pricing. This is to charge different prices to different target markets, which is usually not considered illegal in the case of services. The prices charged differ according to the types of customers being served for example children and disabled people usually get a discount on ticket prices.

In differentiation strategies, the emphasis is on creating value through sustainable uniqueness. This can be achieved through product innovations, superior quality, or superior service, which is then sustained and leveraged through creative advertising; brand-building and strong supply chain relationships. Another requirement for a successful differentiation strategy is that customers must be willing to pay more for the uniqueness of a product or service than the firm paid to create it. A differentiation strategy will lead to higher firm performance only if buyers value the attributes that make a product or service unique enough to pay a higher price for it or if they choose to buy from that firm preferentially. If

Now I want to answer why GSK differential pricing was not successful and made separation between GSK and its American customers? as we know a firm with market power

Today’s highly competitive business world forces companies to create different tactics and relatively rely on multiple pricing strategies to conduct business.

This market allows organization a free long term ability to adjust their good services and prices with the changes in the market conditions. Thus AT&T should take advantage of the freedom in this market structure and ensure that their supply and prices are correlated to their demands.

Differentiation can be achieved in a variety of ways: unusual features, responsive customer service, rapid product innovations, technological leadership, perceived prestige and status, appeal to different tastes, and engineering design and performance. Methods of controlling costs, however, may be limited. The ability to price differentiated products competitively will be important for reducing upward pressure on customer prices so that they do not exceed the level customers are willing to

Avon also uses the aspect of global pricing and this is determined by the state in a certain country local market and strategic objectives. This affects the country in the way that the country with the higher price ships the same products from the country with the lower price this making the company to count loss.

Keeping these realities in mind, it is very much obvious that for this market, we choose and follow a value based pricing and do not keep the price of the product too high. It is advisable rather to follow an average pricing and let the consumers build some enthusiasm around the product.

Boyd, J. D.(2006), DHL parent DPWN Restructures, Traffic World 10/2/2006, Vol. 270 Issue 40, p36

This strategy is usually associated with charging a premium price for the product - often to reflect the higher production costs and extra value-added features provided for the consumer. Differentiation is about charging a premium price that more than covers the additional production costs, and about giving customers clear reasons to prefer the product over other, less differentiated products.