Payless Shoesource Case Study

When it comes to pricing we always strived to provide one of the lowest prices in the market. We decreased product prices by $0.50 on each product each year to appeal to consumers. Since providing a low cost product was one of our strategic goals we did not stray from decreasing prices. Looking back, perhaps we shouldn’t have been so loyal to our strategy when we were unable to turn a profit. While a strategy is important to stick to, being a profitable company is the ultimate goal.

The company tries to establish a new approach to engage with their customers, and the price needs to reflect that. Customers do not pay the premium price for the jeans, but rather for the lifestyle that those products reflect.

market, there is price competition. This can lead to price wars and, therefore, lower prices for

With the entry-level cameras, our strategy was to produce them with very minimal cost to ourselves. Furthermore, by having the entry-level cameras relatively low-cost this will potentially lead to mass production, which was our intended goal for these cameras. These cameras were envisioned where any average customer could purchase it comfortably to use on a daily basis. With that being said, we figured that many other companies would attempt to tackle the same price adjustment strategy that we were operating with. We reckoned that many companies were attempting to raise their prices for entry-level cameras, having said that we altered by maintaining a fairly lower price to raise profits. Unfortunately, we realize that this isn’t working out for our company, and decided to modify the prices, however we preformed this adjustment a bit to late for any major outcomes.

All segments are critical for the implementation of our company’s strategy because we chose to be broad cost leaders. Cost leaders maintain a presence in all market segments by focusing on low production costs and competitive pricing. With that in mind, one segment is considered to be slightly more important than the others: the low end segment. We will compete in every market segment, but this is one of the most important due to the fact that price is the main consideration of the buying criteria at 53% importance. Our costs will be much lower than our competitors which translates into a lower market price for this product, which is ideal for our customers.

d. How much overhead cost do you think Bridgeton and the consultants implicitly assumed they would save by outsourcing these two products?

Price is an important factor in Burberry as price affects the value that costumers perceive they get from buying a product (Jobber & Ellis-Chadwick, 2012). Burberry uses competitive pricing similar to its competitors which produces a psychological effect on Burberry customers (Jacobson, n.d). If Burberry for example lowered its price dramatically then customers may believe the quality has decreased and may presume it’s not worthy to be named a luxury brand. However by being expensive it suggest better quality and desire to sustain its customers as well as making there products seem exclusive.

3. How do you anticipate Altera’s customers will react to this new strategy? What are advantages and disadvantages for Altera’s customers?

Since the demand for the brand has traditionally outstripped supply, the company can easily and without loss charge a premium from its customers. As mentioned the company sells its products at a 100% markup and which in turn translate into increased revenues.

The H&M guarantees value for their low pricing. This strategy of low prices has made the company very successful in emerging markets, according to Jepeson (2014). From the research conducted H&M seems to be practicing a cost based pricing model. The two major constituents of the brand pricing is the high fashion and the lower cost. The company collaborates with renowned designers in order to offer innovative product design but manages to keep prices low through the manufacturing

The shoe market is completely governed by competition. There are no monopolies or any other rules defining the pricing here.

The last alternative could be to create a better marketing about their products, to compare their brand with the competition so the market can understand that the differences between prices is because of the good quality, the brand name, the knowledge, and that they are the only ones, the expert ones on those kind of products.

penetration pricing strategy. All indications are that sales will continue to grow. In response to a

The price which a customer pays is a very important aspect. It is the deciding factor of profit or loss. As far as NL is concerned they are the best in the business, they offer very good price which satisfies the customer and bring about good profits. We also have a non-price competition in the market which they have effective use. Noel Leeming is the only electronic retailer in New Zealand to reward customers with fly buys and giving more than one million rewards. With a correct pricing system, depend the life of the company among its competitors, this this reason behind their 100’years in the

For SF, the other problem is that the company has developed many new products are not considering the desires of customers. SF might need a market research to know the customers need which will help the company to adjust their decision. SF needs a full market research to understand customer needs, which will help companies adjust their decisions. In addition, a good market research can help maximize corporate profits, increase sales, and expand the market. For a profitable company, producing unwanted products is pointless. As a priority target, the customer's willingness is important for the company's better development. Although a lot of SF’s new customers require discount pricing, SF is worried about their brand image will get erode. As a company focused on "the high level market", this move is much more clever, because the company will maintain its market value and its reputation. Mirror & Smoke stated that “ The idea of branding is to make sure that you create a positive experience and back it up with quality processes and technology.” (n.d.). As the company which already has brand value, it is easy to ruin it, but it is difficult to get it back. The customer will always choose the brand which they think is good. Discount pricing might get more