Economic Proposal - Pricing and Non-Pricing Strategies

Economics-Final Proposal

Pricing and Non-Pricing Strategies

Pricing strategies are often used by businesses during the sale of products and services. Prices can be set differently with an aim of maximizing profitability for every sold unit in the market. Price strategies are important since they can act as a defense in an existing market to avoid competition from new entrants. Pricing strategies are important for any business since they ensure an increase in the market share in a given market. Business that make use of these strategies have the surety of benefiting through lowering and raising of prices in the market in relation to the needs of customers as well as their behavioral patterns. It is important for every business to invest in the most appropriate pricing strategy for a successful business. This paper discusses the most appropriate pricing strategies for the digital television sets with a basis on the projected economy's stage in the business cycle.

Pricing Strategies

The world is slowly becoming more competitive by the day. Besides, more developments are taking place especially in the technological world. The world is fast shifting from the analogue world to the digital world. For instance, in the present world, more people are shifting away from using analog television sets to the digital ones. Statistics show that there is a huge shift as far as the sale of television sets is concerned. In the Tech-World outlets, analogue televisions are experiencing a downward trend in terms of sales. As much as the sales team has done its best, there is still poor performance in the market.

Prices can be set using three main strategies: cost-based pricing, customer-based pricing and competitor-based pricing.

Cost Based Pricing

Tech-World is experiencing stiff competition in the market due to the popularity of the electronics business. Cost based pricing is one of the ways this company could use to ensure that the sales remain high throughout. This strategy will also ensure that customers are retained and are able to remain loyal to the company. Cost based pricing is a strategy for setting the product of a good or service by adding a particular percentage or a fixed amount to the cost of the product purchase or manufacture. As much as this may appear as an old strategy, it still serves the desired purpose bringing out the best results. In this strategy, it is very rare to find a client who is interested in the amount placed on the manufacture of the product. What matters most to the customers is the value of the product that they are buying.

Mark-up Pricing

Mark up pricing is also referred to as cost-plus pricing. Many retailers use this pricing strategy as a way of boosting sales.