The Role of Pricing Assignment | Buy Assignments Online
|The Role of Pricing|
Pricing Strategies: Identity three types of pricing strategies. Select a good or service and compare the prices of two different companies associated with the goods or service. Why do different organizations have different pricing strategies for the same good or service? Respond to at least 3 of your classmates.
Respond to Darlene McCurry post
Approaches to the price setting is based on the three Cs: costs, customers, and competitors. Cost-based pricing relies on production and marketing related costs as key elements in determining product’s initial or standard price. Customer-based pricing are prices devrived from buyers’ perceptions of value rather than sellers cost. It includes price skimming and penetration pricing. Competition based pricing are made by organizations for the prices charged by competitors.
A service that I choose would have to be internet service. Xfinity and AT&T are two of Atlanta’s top internet providers. In 2008, AT&T ended their partnership with Google to embark on their internet service for customers. Xfinity which is a trade name of Comcast is the second-largest cable television and largest internet service company in the United States. AT&T offers internet service packages that range anywere from $30 – $75. Comcast offers internet service packages from $30 – $70. With Comcast being one of the leading internet service providers, they are able to offer lower prices that include cable services. AT&T offer internet services and only offer cable services in bigger packages.
Companies offer different pricing strategies for the same product to lure consumers to them. Companies such as Comcast often set lower pricing to attract and retain the customers they have. They not only offer internet but cable service (with all packages) as well which seems as a much better deal to individuals wereas AT&T offers television with certain packages. Companies look to other companies to stay in competition with. They base their pricing strategies on their services and what their competitors offer.
Finch, J. (2012). Managerial Marketing. San Diego, CA: Bridgepoint Education, Inc.
Respond to Kerrick Smith post
Cost – based pricing looks for the break even point or lowest price that it takes to cover both the variable and fixed cost associated with the production of a product. The amount over this price will be considered profit. Customer – based pricing strategy takes into account a customer; the buyer’s perception value that they would receive based on the price placed on either a product or service. Competition –based pricing strategy is used by companies in a way to consider price changes made by their competitors as a way to determine whether to increase or decrease their prices. According to Finch (2012) “Alternatively, they may set a price higher than their closest competitors’ prices as a means of positioning their product as a premium brand”.
Dish Network and Direct T.V. are both satellite television content carriers. Dish Network has service packages that range from 19.99 to 89.99 as long as you sign a contract for 24 months. Direct T.V. charges 24.99 to 92.99 for similar content packages. I believe that Direct T.V. charges more for similar service because the company sees itself as the market leader and therefore their services should be considered premium. Direct TV also has a deal with the NFL network which is used as a marketing tool to draw in customers who enjoy watching football. Also they both provide Internet service and have side deals with third party service providers such as AT&T, Verizon, and Century Link, that offer their services bundled together with other services which each provides.
Finch, J. (2012). Managerial Marketing. San Diego, CA: Bridgepoint Education, Inc.
Respond to Marcus Dillard post
Three Types of Pricing Strategies
A great deal of research and analysis must be completed in order for an organization to determine a price point of a product. In order to establish pricing a marketing leader must assess product-related costs, competitors’ strategies, and customer perceptions (Finch, 2012). Our text details three types of pricing strategies:
- Cost-based pricing: pricing based on production and marketing related costs which includes (1) mark-up pricing and (2) cost-plus pricing.
- Customer-based pricing: pricing based on the buyer’s perception of value rather than the seller’s cost and therefore it is often referred to as demand-driven or value-based pricing.
- Competition-based pricing: pricing that is set based on competitor pricing and can be categorized as either (1) above-competition pricing or (2) niche pricing.
Select a good or service and compare the prices of two different companies associated with the goods or service. I have selected Angel Soft and Charmin toilet tissue. Although both are the same products you will note that Charmin generally sells at a higher price point than Angel Soft. Charmin has the name and years of distinction behind it but there are many people that have moved over to Angel Soft due to the price point.
Why do different organizations have different pricing strategies for the same good or service? I believe many organizations have different pricing strategies because the history and brand name allow the company to feel that they will maintain their true customer base and the few that leave won’t impact the bottom line. Also, I believe many companies feel that the product they offer is premium they maintain a premium price. When a company decides to price lower, I believe it is an attempt to draw interest int heir products. Without the brand name, many consumers won’t give them a try unless they appeal to something that motivates consumers and that would be price.
Finch, J. (2012). Managerial marketing. Retrieved from https://ashford.content.e
|Discussion 2 Product Development Process|
Do an internet search of the new product development process of any product of your choice, and analyze the process for developing the product. Review the reasons why new products fail and make two specific recommendations to improve the high failure rate of new products.
Respond to at least three of your classmates posts.
Respond to AnatalyaMikels post
Fast food companies are continuously introducing new food products into their restaurants. The new product development process includes idea generation, screening, concept development and testing, business analysis, market testing, and commercialization (Finch, 2012). One fast food company that has a very in-depth product development process is Krystal fast food chain. Krystal’s process is a seven step process in which ideas are created using customers, franchisees, and management. The team is collaborative and of utmost importance is consumer insight throughout all steps of the process (Kelso, 2013).
Two fast food ideas that both failed in the past include the McDonald’s Arch Deluxe burger and Burger King’s Satisfries. The Arch Deluxe burger was a gourmet, artisan version of a McDonald’s burger. McDonald’s spent $150 million in promoting this burger only to have it fail (James, 2016). Burger King’s Satisfries were a lower fat and calorie option of Burger King’s regular fries (Becker, 2018). Both of these products proved to be unsuccessful because each of these companies failed to take into account the target market’s opinion.
In the case of McDonald’s Arch Deluxe burger and Satisfries, it seems an important question was not asked during the screening process. As Finch states (2012), this question is “Does the idea fit within the organization’s overall strategy?” (9.3, para.7). If this question was asked during this process, they may not have missed the fact that the majority of McDonald’s customers do not go to McDonald’s because they are looking to eat a gourmet burger and Burger King would have realized the majority of their customers are not looking to eat healthier.
I can imagine both of these companies went through the development and testing phases in their research and development process and this part may have been successful, but the focus groups may not have been the customers that were frequenting the restaurants. While employees of the companies and random focus groups may have found these two food items appealing, the majority of fast-food eaters were most likely not included. To improve the high-failure rate of new products, I recommend that the organization’s overall strategy including the identification of the target market is kept in mind when bringing forth new ideas for products and that the correct members of focus groups be chosen that also match the organization’s overall strategy and target market.
Becker, S. (2018). 15 worst product failures and flops from the past 5 years. CheatSheet. Retrieved fromhttps://www.cheatsheet.com/money-career/worst-product-failures-flops.html/Links to an external site.
Finch, J. (2012). Managerial Marketing. Retrieved from https://content.ashford.eduLinks to an external site.
James, G. (2016) The 21 worst product flops of all time. Inc. Retrieved from https://www.inc.com/geoffrey-james/the-21-worst-product-flops-of-all-time.htmlLinks to an external site.
Kelso, A. (2013). Menu, product development takes patience, collaboration. FastCasual. Retrieved from https://www.fastcasual.com/articles/menu-product-development-takes-patience-collaboration/Links to an external site.
Respond to Troy Watson post
Samsung electronics is one of the largest producers of televisions and mobile phones. The reason Samsung has been able to achieve the high success rate in electronics is having the ability to create high quality products. This is why Samsung created a product innovation team that helps deliver their New Concept Development (NCD) process. The product innovation team was created in 2006 and it provides the company more market insight. There are four stages found within the NCD process such as understand, ideate, concept development, and concept finalization.
The first step in understanding what new product to push is being able to understand the trends. This is accomplished by conducting field research and data collection to understand the user’s perspective. This process isn’t just applied to the consumer but also used when studying competitors.
The second step is being able to generate new ideas. This process is conducted by the thinkers and designers, who study the data collected from step one. This process can be the most time consuming as it requires brainstorming tens or hundreds of ideas.
The third step in the NCD process is the development phase. This is when the team takes all information gained from step one and two and develops their business strategy. This phase gives the company the ability to refine many ideas into one defining concept. Then the concept is developed into a business case.
The final step in the NCD process is concept finalization. The product innovation team works directly with business units during this stage. The team is able to finalize the product concept that best meets the market and consumer requirements.
New products have a high failure rate because they fail to understand the consumer’s needs. These is more common in today’s society because it seems everyone wants their products on the market now and never want to take time to research. This is why I love Samsung’s NCD process because it focuses on field research and data collection. This is one way to limit product failure and should be the first step for every company. Another reason why companies fail when pushing new products is building the business plan. The company may have the best product in the world but not understanding how to market it to your audience with fair prices will cause the product to fail. One way to understand how much your market audience will pay and how to market it to them is conducting a test run. When the test run is being conducted you build more data from that and can send your product to the next stage of production with less of a fear of failure.
Respond to Tenia Miller post
The product, I am choosing to highlight and expound on is the Apple iPhone. This product has gone through several layers and levels of improvement. The first 1st generation of the iPhone was released in 2007 and had nine versions of the phone since. The first part of the new development phase of creating the phone started with recognizing the need for instant handheld access to a computer, which i the first step, generating the idea. Developing the right product, with the correct pricing and target marketing was the essential portion in continuing to create new versions of the same products. Each version changes to meet the necessity of the targeted audience. The upgrades to the headphones, camera, and speakers are improved to gain and maintain the interest of the younger generation. The simplicity of the apps and family features are used for parents and older consumers alike. The Apple Company has master the art of the new development s processes across each product they offer, to include their most recent venture, Apple TV. The live television and streaming service is second to none and allow consumers to capture primary cable channels without cable pricing.
Often companies such as Microsoft and Samsung attempts to compete with similar products such as the Zune vs. iPod. Both products provide the same features, but the iPod can connect and interface with other Apple products, was the Zune fail short. Products regularly miss the mark because they do not identify what makes a product unique and building on the specifics to compete. It is often the underestimation that tanks a product in the first five years.