Different Costs Strategies
Price set to ‘penetrate the market'
‘Low' selling price to secure large volumes
Normal in mass market items – chocolates bars, food stuffs, household goods, and so forth Suitable for goods with long awaited life cycles
May be beneficial if launching into a new market
Higher price, Low volumes of prints
Skim the profit from the industry
Suitable for goods that have short life periods or that will face competition at some point in the future (e. g. after having a patent runs out) These include: Playstation, jewellery, digital technology, fresh DVDs, and so forth
Price emerge accordance with customer awareness about the value of the product/service Examples include position products/exclusive products
Goods/services deliberately marketed below cost to encourage sales elsewhere Typical in supermarkets, at the. g. in Christmas, offering bottles of gin by £3 in the hope that individuals will be drawn to the store and buy other things Acquisitions of other items much more than covers ‘loss' on item sold at the. g. ‘Free' mobile phone once taking on agreement package
Used to play on buyer perceptions
Classic example -- £9. 99 instead of £10. 99!
Links with value costs – top quality goods charged according as to what consumers THINK should be the cost
Going Price (Price Leadership)
In case of selling price leader, opponents have difficulty in competing in price – too high and so they lose market share, too low plus the price leader would match price and force smaller sized rival out of market May follow pricing potential clients of rivals especially exactly where those opponents have a clear dominance of market share In which competition is limited, ‘going rate' pricing might be applicable – banks, petrol, supermarkets, electric powered goods – find very similar prices in most outlets
Various contracts awarded on a soft basis
Organization (or firms) submit their particular price to carry out the operate Purchaser then simply chooses which in turn represents ideal...