Pricing Decision Essay

Companies in their endeavor to succeed in the super competitive and dynamic mart be now deliberateing a clear focalization on their marketing strategies. This is in ordain that they may remain relevant in the fast changing business environment, market conditions and consumer preferences. It is important that a lodge considers the cause of the changes in the business environment including determine variations initiated by its competitors This is vanquish done by first analyzing the determines offered by the competitors visa argue the companys cost organise and the competitors chances to change in response to the companys reinvigorated price offers (Kotler 2003.p 66). Pricing Strategies The company ineluctably to figure out the best dodging to implement in commit to achieve the optimum prices for its products. To initiate cost- knock downting with a view to improve on the positivity of the company the company must obtain an taking into custody of the type of cost th at it take to manage. This will be to a blown-up extent influenced by its style of management, sources of pro advice, the broader vision of the companys goals, converse strategy, and companys capitalization in relation to debt-equity ratio and the cost of borrow (Sherman 2007. p 3-4).The company also needs to understand the several types of cost that it incurs. The various types of cost ar research and learning costs, the overheads and administrative costs, human capital costs including health care costs, salaries and employee benefits, infrastructure and placement costs, advertising and promotional costs, fixed and multivariate costs, and debt-servicing costs. The bottom line is to thoroughly run into each of these cost categories and weigh their enormousness to the companys business operations, consider much than efficient available alternatives, and the feasible implications of the cost reduction strategy (Sherman 2007.p5 & adenine9). A company such as Wal-Mart th at has for years been ahead of its competitors by oblation the lowest prices for its goods. Wal-Mart is able to manage well-disposed price cuts by implementing price cut strategies such as endeavoring to reduce its costs by pursuing a revenue enhancement reduction strategy. This has been through its investments in corporeal Estate Investment Trusts (REITs) in send to exploit tax loopholes and avoid nearly of the taxes levied in particular states (Moore 2007. p. 2). Having accomplished the preceding(prenominal) cost reduction strategy, the company may the come up with appropriate set for its products.This is done by first understanding determine methods. There are sise set methods that would lead to an informed finding in fixing prices. These are markup pricing method, the target return pricing method, sensed value method of pricing, value establish pricing, the going-rate method of pricing and the sealed-bid method of pricing (Kotler 2003. p 66). Implications of Price C uts and Conclusion The price of the product or service is a major factor that influences customers purchase decision is the marketing mix.A combination of the cost reduction strategy and an appropriate pricing strategy is more likely to benefit the company and alter it attain a competitive service over its competitors. By adopting market responsive cost cutting strategies in the parley industry, companies in turn helped create a better way of life whereby customers are now able to communicate more often and at lower prices Salazar 2007. p. 1). This translates to change magnitude profits to the service providers as they are able to sell more units than before. References Kotler, P. (2003). marketing Management. 11th Ed.New Jersey learner Hall. Moore, M. (2007). Taxing Strategies Always strip Prices, Wal-Mart Attempts to rollback Taxes. Retrieved frame in 8, 2009 from http//walmartwatch. com/img/blog/NIMSP_tax_strategies. pdf Salazar, L. C. Cost Cutting Strategies at the Bot tom of the Pyramid. Retrieved March 8, 2009 from http//www. lirneasia. light up/wp-content/uploads/2007/03/2-lcs-shoestrings-sing-28feb07. pps Sherman, A. J. (2007). Strategies for Cutting Costs and Improving Profitability. Retrieved March 8, 2009 from http//www. sbecouncil. org/uploads/PPT%20Cost%20Cutting%20for%20Growth%20and%20Profitability. ppt