Pricing Strategy

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.

One of the pricing strategies that was heavily used around the store, as well as almost all competitors, was odd-even pricing. It was difficult to find a product at any of the stores I visited to find a price that did not end in .99. The company was also using price lining, or selling a line of products of the same functionality with differing levels of quality at different price points. A good example was their line of speaker wire, which came in several

A lower per-unit price ($60) is charged if the buyer purchases a greater quantity of the tablet (in this case 3). Just like first degree price discrimination, the seller will extract some of the consumer’s surplus and gain profits.

Loyalty programs include frequent flier miles or points systems associated with credit card offers that can be used only with the original company, creating a perceived loss or cost when switching to a competitor. Most programs are able to get consumers to spend more money just to get to free or bonus item.

The current pricing is 30% off publishers’ suggested retail prices for hardcover bestsellers and 20% off select feature titles in departments such as children’s books and computer books. Barnes & Noble.com implemented an “everyday low pricing” model that provides a single, low price for each item site-wide for members and non-members and enables the company to offer better value to its customers. (para. 10)

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

This is because of each seller is setting its price based upon the reaction by the prices its competitor establishes.

However, there are several factors for the company to choose its pricing strategy. In this case, it may be better if the company choose to sell its product at $21.50 instead of $15.50. This is due to the fact that price-cutting appears to be not a good strategy in this industry. If every player in the same industry starts to lower the price of their products, every company will end up having the low price, which in turns lead to a low profit margin. Moreover, referring to the calculation in a below table, it also implies that if the price is lower than $12, sales will not be able to cover the variable cost incurred, thus it will bring about a loss in net profit.

The big retail stores have the advantage of making the highest possible margin as they buy in bulk from the suppliers and hence they can afford to play with their prices.

The strategy of lowering prices to increase market share or at the least maintain current market share is based in part on research. A shopper research program that the company created shows that customers will completely back off from the brand when they are the slightest bit price sensitive. Currently, the Jones Blair brand is priced about 20% higher than the mass marketed national brands. Lowing the prices by such amount would increase market share that would hopefully be compensated for by increased number of purchases.

Competition Based Pricing. The price under this route was determined to be $3,400 (see Appendix C). Under this route, the company will earn more profit per bundle sold. Additionally, minimal effort is required to determine the price. However, the competition based pricing creates indifference between the “Atlantic Bundle” and its competition. The higher price will also reduce market share and could stir a pricing war.

Based on these 6 factors in setting a price: selecting the pricing objective, determining demand, estimating costs, analyzing competitors costs, prices and offers, selecting a pricing method and selecting the final price, Singapore GP Pte Ltd employed 2 different pricing strategies. They are

The three main pricing strategies Amazon utilizes are price skimming​, focusing on what they sell well​, and price matching with competitors​. First, Amazon charges the highest initial price that customers will pay, then they subsequently lower the price to attract other customers. Second, Amazon focus on what they sell well. Most people purchase from Amazon for the most popular categories, such as electronics, toys and games so most of their competitive prices are found in those categories. On the other hand, their most expensive prices are in their not very popular categories, like automotive parts. Third, Amazon price match with competitors. "Amazon is more competitive against some of the most notable retailers in the industry, on average 12% cheaper than Target and 16% cheaper than Toys R Us" (Ari

Now looking at the three marketplaces that we have chosen to explore for our product, we conclude that in terms of consumer behavior, buying habits, values and concerns, these three marketplaces are totally different from each other. It is very evident that each region requires a separate pricing strategy and so that is what we are going to follow in this global plan of our company.

In addition, in thе third part, thе author analyѕе how L’Orеal followѕ a nеw product dеvеlopmеnt ѕcrееning procеѕѕ. Thе ѕix ѕtagеѕ involvеd in N.P.D will bе talkеd about in thiѕ part, еѕpеcially thе Idеa Ѕcrееning procеѕѕ to ѕhow how L’Orеal’ѕ nеw productѕ can offеr a clеar bеnеfit and provе itѕеlf accеptablе in uѕе.