MKT 301 Mod 4 Case
To start off this assignment, first make sure to review the required background materials carefully and make sure you have a solid understanding of the various pricing strategies and when they are typically used. There is also a listing of optional readings that may help you with the concepts and could serve as useful references for this assignment.
Once you have finished reviewing the background materials, think carefully about the following situations and write a four to five page paper discussing what pricing strategy you would recommend in each of the situations. For each recommendation, make sure to explain your reasoning and to cite one of the required background readings in support of your recommendation: 1.A company has developed a new 3D television with outstanding displays. The company has a patent on a new technology that doesn’t require glasses to see the 3D effect and has a display far better than those of any competitor’s 3D televisions. The company still has to compete with other television manufacturers, but because of the patent and superior technology it is likely to have a large advantage in the 3D television market for at least a year or two. 2.A brand new company has developed a new dishwater detergent which is comparable to other major brands in quality, but the company has developed a new manufacturing technology that over a period of time should be able to produce detergent at a cheaper cost than any competitor. The cost of the new manufacturing equipment was high, but once the equipment is paid off it should be very cheap to produce each bottle of detergent. 3.You have just opened up a new electronics shop and Apple will be releasing their latest iPhone in a few days. You are confident that once customers come into your shop they will be impressed with your large selection and knowledgeable and friendly sales staff and will become loyal customers. However, given the nearby location of Best Buy and other popular electronics shops it will be a challenge to get customers into your shop. So the first big pricing decision you have to make is what to charge for iPhones. 4.You have started a new fashion company, and your partner in this business is one of the top designers in Italy. You and your business partner’s plan is to become known as one of the premier manufacturers and designers of blue jeans in the world, and hope to have a very high end brand well known among the wealthy and fashion conscience.
Back Ground Info… As with Modules 1-3, start off by reviewing the Pearson tutorial:
Pricing. (2014). Pearson Learning Solutions. New York, NY.
The following reading is relatively simple and reinforces the discussion of some of the key pricing strategies discussed in the Pearson tutorial such as skim, penetration, and cost-plus pricing and also covers some additional pricing strategies. One strategy to pay close attention to in this reading is loss-leader, a commonly used strategy:
Paley, N. (2006). Chapter 10: Pricing for profits: Strategies to maintain premium prices and higher margins. Manager’s Guide to Competitive Marketing Strategies. Thorogood, London, GBR. [Ebrary]
The following book chapter is a little more advanced but has good real world examples. Pay especially close attention to the section “How do pricing methods fit with Marketing Strategy” and the table on page 187. This table provides an excellent overview of some common pricing methods, when to use them, and risks involved in the method:
D’Antonio, L. (2012). Chapter 10: Pricing. In Bolland, E., & Fletcher, F. (Eds.). Solutions: Business Problem Solving. Abingdon, GBR: Ashgate Publishing Ltd.[Ebrary]
Among the optional readings, pages 304-307 of Economy (2008) has a simple overview of some common pricing strategies plus a discussion of value-based pricing from the point of view of running a services firm.
Optional Reading
Economy, P. (2008). Chapter 21: Advanced pricing strategies. Consulting For Dummies (2nd Edition). John Wiley & Sons, Hoboken, NJ, USA. [Ebrary]
Richardson, N. & Gosnay, R. (2010). Chapter 8: How communication works. Creating Success: Develop Your Marketing Skills. Kogan Page Ltd., London, GBR. [Ebrary]
Burton, M., & Holden, R. K. (2008). Introduction: Why pricing is so hard and why most companies mess it up. Pricing with Confidence: 10 Ways to Stop Leaving Money on the Table. John Wiley & Sons. Hoboken, NJ, USA. [Ebrary]
Ruskin-Brown, I. (2006). Chapter 4, Part 4: The marketing mix – marketing pricing. Mastering Marketing. Thorogood, London, GBR. [Ebrary]
Cheverton, P. (2004). Chapter 28: Price. Key Marketing Skills: Strategies, Tools & Techniques for Marketing Success. Kogan Page, London, GBR. [Ebrary]
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