Pricing Strategies : Pricing Strategy Essay

The key to successful pricing is to match the product with the consumer's perception of value.

I will then make sure I create value for each customer segment and create a pricing structure that will align price with the value delivered. On the other hand, most of the customers usually perceive that the higher the price charged, the higher the value is attached to the goods they purchase or services offered. This also becomes a cutting edge in determining the pricing strategy to use as I anticipate my clients to perceive what I offer them to be of a high value.

This based on customer pricing method. It relies on consumer 's emotive responses, subjective views and feeling towards specific purchases.

Consumers have certain types of perceptions of price in correlation to the product quality and service; therefore, company should base their price on the customer’s perceived value (K&K). Some consumers are price sensitive, while others are quality or both. “The key to perceived-value pricing is to deliver more unique value than competitors and to demonstrate this to prospective buyers” (p.183). For example, Dish Network has introductory price for a year or two, then it bounces back to regular price. Also, the company offers different TV packages, which can be customized according to the station most watched or one can pick one of the package the company provides. I have been with Dish Network for more than 5 years and one thing that kept

When discussing cost of service, average cost would be the cost that Hardee should focus on. Choosing average cost over marginal cost is beneficial because, it contains the cost of both fixed and variable cost; which means that everything that pertains to production is addressed in the overall cost price. Hardee would benefit from using the cost of service method, because they would be able to break even or surpass their original cost of production. However, a disadvantage of cost of service, is that Hardee might lose customers because the customers don’t care about the cost of production. Value of service pricing is a pricing method that is established based on how valuable the service is to consumers in its market. The advantage of Hardee using value based pricing is that the customer will prices that are convenient to them, which could increase the number of their consumers. The disadvantage that Hardee will face from value

[ (Wasserman, 2012) ] This approach could return the greatest profit margin but would cause a fluctuation in price when other costs increase. According to Professor Osteryoung, one should be aware of what competitors are charging for the same service. Yet he cautions against competing on price. Instead, he suggests that service companies compete on service, ambiance, or other factors that set [them] apart," [ (Wasserman, 2012) ] The other factor discussed by Professor Osteryoung is perceived value to customers. Osteryoung points out that setting a price for a service can be subjective. He rightly posits that pricing (for a service) becomes an art form when one considers that “the important factor in determining how much (a customer is) willing to pay for a service may not be how much time was spent providing the service, but what the customer perceives as the value of the service and the level of expertise,” [ (Wasserman, 2012) ]

prices/value: The price of the products need to be reasonable compare to the value and quality it has. The consumer will also compare the price with other competitors and its quality and efficiency of the products. The company need to

A pricing strategy takes into account segments, ability to pay, market conditions, competitor actions, trade margins and input costs, amongst others.

Value pricing is used where external factors such as recession or increased competition force companies to provide ‘value’ products and services to retain sales.” The

Price, which is one of the most important elements of the marketing mix, can be difficult to get right. Pricing too high, or low, can negatively impact on customer satisfaction and revenue. Adopting a pricing strategy is necessary to achieve desired sales objectives (Chan & Wong 2005).

* Value Pricing - Our product offers a variety of benefits that gives our product high value in consumer’s eyes. Consumers would be hard pressed to find a natural product with the same number of benefits.

As mentioned in the literature review valued items the company will have to use value based pricing strategy where customer perceived value are protected.

Keeping these realities in mind, it is very much obvious that for this market, we choose and follow a value based pricing and do not keep the price of the product too high. It is advisable rather to follow an average pricing and let the consumers build some enthusiasm around the product.

The value pricing is a concept of categorize the prices of different services or products based on the value it provides to its customers. The price determines by the management based on the unique feature that service or product has in it and customers gets charged higher or lower based on those unique features and quality.

As is known, pricing is one of the most important steps for business plan which needs good research, calculations and formulations. There are different pricing strategies to put into effect due to the market and product conditions, such as premium pricing, penetration pricing, economy pricing, price skimming(Voice Marketing, 2012). These four pricing strategies are main pricing policies. They form the bases for the exercise. However there are other important approaches to pricing. These pricing strategies are: Psychological pricing, product line