Wait a second!
More handpicked essays just for you.
Penetration Pricing Strategy Essay
Penetration pricing vs skimming pricing which one is better
Don’t take our word for it - see why 10 million students trust us with their essay needs.
The Pros And Cons Of Penetration Pricing
573 Words2 Pages
Recommended: Penetration Pricing Strategy Essay
Problem 1:
Penetration pricing is involved when a company is launching a product in a market where the product that is low priced while the company intends to secure market share. This scheme calls for extensive planning. For proper execution of the pricing scheme, the company or manufacture must be ready and willing to produce the specific product in large quantity. The company or manufacturer should also launch a big campaign that will mainly publicize the low prices of the new products. The business owner must take nit that the penetration price result in an expensive operation and the owner must be readily prepared for the cost. With a low consumer demand, the business might suffer from an accumulated stockpile of product without market and hence they become unwanted.
Price skimming is a strategy that mainly focuses on profit increase and maximization through charging high prices to the early customers of the new product. The prices is the reduced with time to attract the thriftier consumers. The reduction is mostly done after a significant amount of sale has been done. When ...
Related
Irwin Sport Case Study
1724 Words | 4 PagesIrwin Sports is embarking on a new and untested marketing strategy of price skimming'. (Existing of a lot of concerns from potential consumers about price).
Analysis Of A Couple Of Squares
864 Words | 2 PagesA couple of Squares has a limited capacity for which to produce their products and smaller companies tend to have larger fixed costs than bigger companies. Therefore, A Couple of Squares must maximize profits in order to ensure that they will stay in business. A profit-oriented pricing objective is also useful because of A Couple of Squares’ increased sales goals. A Couple of Squares increased their sales goals due to recent financial troubles. Maximizing profits is the easiest way to meet these sales goals due to the fact that A Couple of Squares has limited production capacity. The last key consideration favors a profit-oriented pricing objective because A Couple of Squares offers a specialty product. A specialty product often has limited competition, therefore can be priced on customer value. Pricing at customer value will maximize profits as well as customer satisfaction. A Couple of Squares’ lack of production capacity, increased sales goals, and specialty product favor a profit-oriented pricing
Allround Executive Summary
1150 Words | 3 PagesPricing Strategy: We are going to take into consideration inflation, benchmarking and customer trade off. The pricing strategy for the new products/line extensions will be a penetration-pricing strategy to gain customers from other competitors and increase market share. Further, the volume discounts are going to be in the range of 25-40%. Taking into consideration Product lifecycle, those will be raised in the time where new products/line extension are launched.
Cabela's Pricing Strategy Case Study
595 Words | 2 PagesSetting prices too high would discourage purchasing and setting prices too low negatively affects revenue. While several pricing strategies exist, the use of a value-based pricing system, as implemented at Cabela’s, offers an optimal strategy that meet both customer expectations and company requirements.
Augustine Medical, Inc.
1890 Words | 4 PagesThe company subcontracted the production of the heater/blower unit and manufactured the heating covers in-house.... ... middle of paper ... ... The penetration pricing strategy will attract sales selling these products separately because the main product (heater/blower unit) will be sold at a discount and the complimentary product will be marked up.
Dynamic Pricing Case Study
704 Words | 2 PagesThe focal article I chose is Dynamic Pricing: The Future of Ticket Pricing in Sports by Patrick Rishe published on January 6th, 2012 through Forbes. Pricing is an important component of the marketing mix because it is the element where managers have expectations of customers paying their money to the organization (Kopalle, 2009). Compared with other elements of the marketing mix, pricing has the advantage because there is a high level of flexibility. The flexibility is because prices change continually (Smith, 2008). The opportunity of quick price changes also has disadvantages. For much of the 20th century, the vast majority of sport managers employed one of two pricing strategies: the one-size-fits-all approach, where every ticket price
Price Gouging Essay
722 Words | 2 PagesPrice gouging is increasing the price of a product during crisis or disaster. The price is increased due to temporal increase in demand while supply remains constrained. In many jurisdictions, price gauging is widely considered as immoral and is illegal. However, from a market point of view, price gouging is a correct outcome of an efficient market.
Product Pricing
1498 Words | 3 PagesPricing is an important aspect of every business. Chief Financial Officer’s (CFO) use pricing to create financial projections, establish a break-even point, and calculate profit and loss margins (Power Point, 2005). It is the only element in the marketing mix that produces revenue. Price is also one of the most flexible elements of the marketing mix as it can be changed very quickly. This is usually done to beat competitor prices in an attempt to fix the product’s market value position very low (Anderson & Bailey, 1998). After all, high prices make it difficult to become the market share leader. The leading US retailer, Wal-Mart, is an expert at low product pricing as evident in 2004 with $250 billion dollars in sales to their 138 million weekly shoppers. However, they are also responsible for reducing prices so low that it drives specialty stores out of business. This is the effect Wal-mart has had on many toy stores and has almost closed the doors of the famous toy store Toys “R” Us Inc.
Samsung Revenue Essay
730 Words | 2 PagesBesides, they approach by producing innovative product with a wide range of smartphone with various operating systems, shapes, sizes and prices to their customers with attractive prices. With comparative items function, Samsung products cost is constantly lower from 10-15%. Samsung has utilized its interior resources and applied to their production system, as a result, this will decrease the cost of production and offer more option to the customers. Diminishing the cost is another strategy for Samsung to attract customer attention and to increase the sales volume. Pricing strategies consist of several different types such as price skimming, competitive pricing, penetration pricing, discount pricing and product life cycle. Samsung utilize different pricing strategies to different product. Firstly, price skimming. It is higher price had been set ahead, before competitors penetrate the market. Therefore, Samsung applies pricing strategy in selling their products, for example hand phone. Once the company releases new model, they will decrease the price of the previous model to compete with another competitor. Second, Competitive in pricing. Samsung utilize a competitive pricing strategy when other organisations offer similar products and services. Samsung set their total cost of a
Persuasive Speech About Shopping
829 Words | 2 PagesHave you ever overpaid for something? I think we all have. Your money—practically wasted. Luckily, I can teach you how to put an end to the anguish and regret you feel when you find your wallet and your shopping bag practically empty. By taking advantage of promotions, shopping second-hand, and comparing prices, you can prevent yourself from making the mistake of blindly overpaying.
Marketing Strategy Of Lawn Mower
1052 Words | 3 PagesThe pricing strategy will start out rather high for this product upon its release in order to draw a more selective crowd such as the upper class members of the urban society. Once the product has succeeded within this market there will be a development of additional variations of the product which will allow for certain models, with less features, to be sold at a lower price point in order to attract the members of society who are less willing to pay the high asking price for the top of the line version of the
Advantages And Disadvantages Of Perfect Competition
743 Words | 2 PagesAn oligopolistic market has a small number of sellers dominating market share and therefore barriers to entry are high. These sellers are highly competitive and do not act independently of each other. Access to information is limited so sellers can only speculate of their competitor’s actions. Sellers will take advantage of competitor’s price changes in order to increase market share.
Pricing Strategies of the AUDI Automobile Company
769 Words | 2 PagesIntuitively, a cost-plus approach sets a lower boundary for the selling price. Yet to pitch a competitive price on the market, it takes more than that. The demand forecast advocates opting for the lowest selling price which yields the highest return. A market penetration strategy necessitates thorough knowledge of the selling prices of the nearest competitors and their retaliation potential. Ideally, the lowest price in the market of £10,400 dictates the upper ceiling of AUDI’s price discretion. However, setting initially a too low price in the hope for increasing it subsequently is not a viable option, as prices are somewhat inflexible upward. Instead, costs have to sink in the long run. Nevertheless, claiming a larger market share will allow AUDI to deftly climb the steep learning curve, lower its costs and further mobilize against market followers. A high price elasticity of demand insinuates that profit margins will continue to soar, if selling prices are reduced any further. As the point of maximum profit is apparently not yet reached, the company is advised to extend the range of the forecast. But is the highest profit naturally the best profit?
The Effects of Piracy on the Music Industry
1131 Words | 3 Pages...n the companies will have to decrease the price otherwise the product will not be sold at higher prices and the revenue would not be as large as companies would like to.
Essay On Marketing Strategy
3236 Words | 7 Pages...e enough because the company has chosen the best possible way to increase the company performance. The pricing strategy is the company’s best strategy from all because it affected the sales revenue a lot. Although fluctuating the price is quite risky for a business since the customers might order from other companies if the company doesn’t do it properly, but XXX Company manage to done it well so far. The effectiveness might also be seen by the average of sales revenue between January to August from 2011 to 2013.
More about The Pros And Cons Of Penetration Pricing
Irwin Sport Case Study
1724 Words | 4 PagesAnalysis Of A Couple Of Squares
864 Words | 2 PagesAllround Executive Summary
1150 Words | 3 PagesCabela's Pricing Strategy Case Study
595 Words | 2 PagesAugustine Medical, Inc.
1890 Words | 4 PagesDynamic Pricing Case Study
704 Words | 2 PagesPrice Gouging Essay
722 Words | 2 PagesProduct Pricing
1498 Words | 3 PagesSamsung Revenue Essay
730 Words | 2 PagesPersuasive Speech About Shopping
829 Words | 2 PagesMarketing Strategy Of Lawn Mower
1052 Words | 3 PagesAdvantages And Disadvantages Of Perfect Competition
743 Words | 2 PagesPricing Strategies of the AUDI Automobile Company
769 Words | 2 PagesThe Effects of Piracy on the Music Industry
1131 Words | 3 PagesEssay On Marketing Strategy
3236 Words | 7 Pages