Summary of Chapter, Pricing Strategy Assignment Example | Topics and Well Written Essays - 500 words - 5

Summary of Chapter, Pricing Strategy - Assignment ExampleThe percentage of profit that company deems fit is added to set the final constitute. The cost price strategy becomes viable for harvest-tide only when defined sale volumes be estimated and met through effective marketing. This is a flawed strategy as it relies on sales volumes and if they are not met, the cost goes up and adversely impacts the performance of the company. It also totally ignores the customers who are increasingly become the major part of concern strategy and marketing.Competitor based pricing primarily believes in the price strategy of its main competitor and follows the same regardless of its repercussion on its profitability. This is malign because each has its own constraints and inputs that need to be considered in the pricing strategy. It becomes fatal when the competitors strategy is based on selling the product no matter of loss.The market-led strategy is best described by setting ones pricing base d on the pricing of its competitors. The pricing is either the same or lowered so that to gain market position. Sometimes, when value addition to the product provides it with unique features, firms can maintain their market position even when the price is raised. This is approximately prevalent in the contemporary environment of high competition. Glaxos Zantac had overtaken SmithKline Beechams Tagamet because it had fewer side effects in ulcer treatment.Thus, product pricing also influences customers perceived value of the product. Three techniques tradeoff analysis experimentation and economic value to the customer or EVC are used for understanding customers perceived value of the products. The tradeoff analysis uses customers requirements for a product and adds or removes those properties within the product to make it piquant to the customers. Firms can raise the price despite heavy competition. Experimentationtests the preferences of customers by placing the same product with v arying prices at a different location.