Pricing Strategies: Identify three types of pricing strategies. Select a good or service and compare the prices of two different companies associated with the goods or service. Why do different organizations have different pricing strategies for the same good or service?
Marketers and companies use different pricing strategies for their products and services. The first approach is cost-based pricing. This pricing strategy depends on the costs incurred to produce every product or service. The company includes its profit at the final cost of the product. The second one is customer-based pricing. This pricing approach depends on the level of demand. The selected price depends on the perceptions of the targeted consumers. Competition-based pricing is the third strategy whereby the organization makes its decisions in response to the prices of its competitors (Finch, 2012).
Apple Incorporation produces and markets smartphones and mobile devices. A good example is the iPhone 4. Samsung Incorporation also produces similar mobile devices. Samsung sells its smartphones at a relatively lower price compared to Apple Incorporation. Most of these devices have similar features and applications. These two companies use different pricing strategies for their mobile devices. Samsung uses both cost-based and competitor-based pricing strategies. This practice makes the company a leading marketer of smartphones in the industry (Grewal & Levy, 2011). Samsung competes with some leading companies such as Nokia and LG. Apple uses a consumer-based pricing strategy. The approach will make the company’s products more attractive to every global customer.
Every business uses a pricing strategy that supports its objectives and goals. A business might have a unique target market for its product or service. The same company will use a different strategy for the same product depending on the level of competition. Every business organization will use different pricing strategies depending on the lifecycle of its product or service. A company might also use any of the above pricing strategies. This approach will create a difference in the pricing process. The marketer will use different pricing strategies in order to benefit from the pricing process (Finch, 2012). The case of Samsung and Apple explains why companies use different pricing strategies.
Do an internet search of the new product development process of any product of your choice, and analyze the process for developing the product. Review the reasons why new products fail and make two specific recommendations to improve the high failure rate of new products. What lessons do you draw about the importance of using a concurrent rather than a sequential approach in the product development process? What impact does the effective management of the product life cycle have on the market success of a new product?
The decision to develop a new process is complex and calls for patience. The selected product for this exercise is the iPad. The first process was the generation of the idea. Apple Incorporation completed a survey to establish the profitability of this new product. The second process is Idea Screening (IS), whereby the company eliminates every doubt. The next step is concept testing and development. Apple uses this stage to come up with the best engineering details for the iPad. The fourth stage is business analysis. This stage involves estimating the possible volume of sales and profitability (Finch, 2012). The next stage is market testing. Apple Incorporation uses technical implantation and commercialization to initiate and launch the iPad. The company uses new product pricing strategies in order to achieve its marketing objectives.
New products might fail because of a number of reasons. The first one is the failure to follow the key processes involved in new product development. The company might fail to conduct the best testing and implementation for the product. The approach used in the new product development process will also determine the success of the new product. This discussion explains why every business should consider the above eight procedures. The engineers and developers should also use “a concurrent approach in the product development process” (Grewal & Levy, 2011, p. 48). A concurrent approach ensures there are more teams working simultaneously. This method eliminates wastes and reduces the costs incurred during production (Grewal & Levy, 2011). The company completes both the process design and product simultaneously. This process ensures the engineers identify every flaw in the process. The other good practice is using the best management process for product lifecycle. This practice will also ensure every product goes through its lifecycle. The team will also make relevant decisions and strategies in order to realize their goals.
Reference List
Finch, J. (2012). Managerial Marketing. New York: Bridgepoint Education.
Grewal, D., & Levy, M. (2011). Marketing. New York: McGraw Hill.