Pricing Essay Example | Topics and Well Written Essays - 1000 words

Pricing - Essay ExampleIn this method, the economic values of all the inputs applied when ontogeny the mathematical product are summed. The other method is the value based method. This focuses on the values of the product. In this method, the value of the product is the extent of the customers satisfaction and, therefore, forms the criteria for price compensateting (Smith 145). Value based method would be book for this case since there is no emulation in the market. Mark-up approach and the fixed percentage approach would as well do for this same reason that there is no competition in the market. Therefore, balancing out on the application of these methods in price setting would be appropriate. Competition based method would not be relevant in this case since there is no competition in the market. Price skimming outline pull up stakes fall as one of my consideration. This is mainly because the product is hot and does not have a replica of it in the market. For this reason, the market prices must be higher than what other existing products address (Smith 289). The in the buff product is of a higher quality with higher fill due to the additional features this justifies the reason for prominent it a higher price. On the other hand, I must consider how the consumers perceive higher prices and what their land on increased prices could be. The bottom line in this consideration is that high prices can be set initially and well accepted, while it may not be easy to hike prices at a later date. Beginning the sales of a smart product at a high price is more advantageous. The quality of the product in this case being high would justify the high prices. The new machine is one of its own hence, the competitors are kept away already for setting new competition on the product. In this case, I would not apply the market penetration pricing since there is no competition. The fact that this product is unique makes it more appropriate for me to set higher market p rices since building demand quickly will not be affected because it is not produced by any other competitor. It would besides be necessary for me to choose tactics that would go well with both the company and the customers. As such, measuring stick discount would deem necessary for a higher rate of stock flow to be realized. The quantify of such high quantity purchases must be put into consideration before I purport such discounts. Having the mind of the customer at the point of price setting would become necessary for me. This will be in terms of how the customers perceive the product and the feeling they may develop over the new products and the set prices (Smith 68). This psychological aspect in price setting may help in maturation a notion of how the customers would react to certain prices. Internal and external reference prices would apply in this case. erratic prices will be considered as the customers would most likely perceive the prices to be low. The number 9 at the end is the trick to be applied in this case when pricing. Zone pricing would apply considering the cost of shipping. The product would cost much more for consumers who are located far away from the manufacturing zone. Bundled purchases would be precondition a discount on purchases. For those who buy the washing machine and other products within the company travel a discount. These are aimed at ensuring a high number of purchases of the company products with the help of having the new product in the market. Long-term and short-term pricing tactics would contrast in this case. The short-term strategies would be in the main responsive to the prevailing conditions