Different Forms Of Pricing Strategies

Swing Manufacturing and Steady Manufacturing both operate in the widget industry, but with radically different cost structures. Swing is a capital-intensive, automated manufacturer, while Steady is a labor-intensive "job-shop." Monthly operating data are as follows:

Consumers always base their decisions on price. The price of an item is important as it can influence consumers to purchase the product or not. If a product is out of their price range most people aren’t likely to purchase the product unless

In this essay I will asses the key points that influence the pricing of products and how businesses use certain methods to price their products to get the beneficial profits for the company. These include, target pricing, cost based pricing, penetration pricing and skimming. I will furthermore calculate the Break even point for Alpha and consider whether the pricing method used is necessarily the best option for their product and advise them on which method would be best suited for them.

The assignment for this week’s paper is to discuss increasing product prices and implementing successful pricing strategies. The paper will discuss effective measures that can be instituted to increase prices and experience customer satisfaction at the same time. In addition, specific strategy will be analyzed for its success in price increases. This is always a sensitive subject both for the company selling the product and the consumer making the purchase. Companies increase prices due to a need in the financial area. However, the impact is always adverse for the consumer. Finding this balance can be somewhat complicated because it entails a lot of risk. The chance of losing loyal customers to competitors is a large risk.

Pricing is one of the important elements of the markets mix, which generate a turnover for the organization and must reflect supply and demand relationship. Pricing a product too high or too low could mean a loss of sales

Pricing is one of the four elements of the marketing mix, along with product, place and promotion. Pricing strategy is important for companies who wish to achieve success by finding the price point where they can maximize sales and profits. Companies may use a variety of pricing strategies, depending on their own unique marketing goals and objectives.

• Pricing of a product is extremely crucial for a business because “the price of your product can either break or make your business”[i]

The value-pricing strategy, in marketing is essentially a business strategy utilized in companies to set prices and promote products based on how much benefit and usefulness customers identify a product, good, or service to have (Thibodeaux, 2016). Furthermore, value-pricing strategy is a concept of determining a price that captures a greater portion of customers and what they are willing to pay for that product or service. Moreover, it 's how customers base their decisions when they intentionally think about which product to purchase. Likewise, this strategy employs the buyer 's knowledge, attitude,and viewpoint of monetary worth and not the actual seller 's cost as the key aspect of pricing. Therefore, when utilizing value-pricing strategy, it is essential to use the buyer 's perception of value (Marketing-Insider, 2016). Customer value-based pricing is setting a price based on buyers’ perceptions of value and in addition, a price must be set ahead of time within the marketing timetable before it is welcomed by customers versus setting the price of the product after the product is already designed and implemented.

Establishing the value of a product or service is not easy. A wide variety of relevant factors such as the cost of goods or services, the market factors, sales volume, competition, economic conditions, must be taken into consideration. Although, price desideratum is an ideal hard to reach, the price should be high enough to cover the costs and generate revenue.Pricing it may have different guidelines. The most relevant pricing strategies are cost-based pricing, value-based pricing, and competition-based pricing.

Product pricing is regarded as the least exiting element of the marketing mix however it is the only element that directly relates to income and also an element which crosses over dramatically to other element .Promotional campaigns frequently carry messages about price, sales promotions are often based on price reduction and discount, price coveys message about the quality of the products and it can even discount, price conveys message about the quality of the products and it can even control the features and benefits of the products (Stin,1998).

A company’s pricing strategy can offer a low price to stimulate demand and be able to gain market share as it focuses on specific economies in administration, production and marketing, striving to be as lean as it can without diminishing the overall level of quality it chooses to produce and be known for in the market (Heiman, 2010). One of the many difficult decisions a company has is to have a detail understanding of planning the costs that are involved in producing a product, delivery, service as well as factoring in the organization to set their pricing. Therefore, a critical component of the pricing is to understand the market demand, life cycle and the competitors actions would assist in deciding how to price your products and

Price: The price determines what the customers are willing to give to purchase the product.

Yet pricing decisions can have important consequences for the marketing organization and the attention given by the marketer to pricing is just as important as the attention given to more recognizable marketing activities.  Some reasons pricing is important include:

2. Cost----Price becomes cost to the customer. It includes the customers purchase cost, also means that the ideal product pricing. This should be lower than the customers psychological price, but also can let firm makes the profits.

Price – The price of the product maters for everyone whether the company or the customers. It puts a great impact on marketing strategy.