Question

Identify a product that has variances in pricing depending on the time of day, the day of the week, time of year, location, or market segment. Why is the company using this pricing strategy? Please cite your sources.

Answer 1

Price is the important factor of a product or services. The price of the product or service is different according with the different factors. The pricing decision or pricing strategies are plays vital role in business. The business are use variety of pricing strategies when selling a product or services.

There are different factors that determines the price of a product or service. The product cost, utility and demand, competition, pricing objectives ,legal and government regulations etc are plays important role in the price fixing.

The time of the day,day of the week ,or the time of the year are also influence the price. Some days or some times ,or certain seasons ,demand of the certain products or services are very high. So the price is affect that.

Different companies or business use the different types of pricing strategies for their survival. The companies mainly using the pricing strategies for sell the product and services or entering into a new market. The pricing strategies helps to the companies to easily capture the potential customers as well as smooth path for entering in to a new market. So the companies gives more importance to the pricing strategies. Different companies use different pricing strategies according to their products cost, competition, pricing objectives etc.

There are different types of pricing strategies. That are

Price penetration

Price skimming

Competition based pricing etc.

The price skimming strategies is the very common strategies that used by the companies. The price skimming means the company use the low price for product or services at the initial level,once the customers are satisfied ,then the price of the product or service is increased gradually. The penetration is just opposite to the skimming strategies. The competition based pricing is the another strategies.which means companies identify the price of the competitors and fix the price on the basis of it. Lots of variety strategies used by the companies for their existence.So the companies gives more importance to the pricing strategies.

The pricing strategies of the companies is helps to attract the new customers and also retain the existing customers. And the pricing strategies is helps to face the competition. The another advantage of the pricing strategies is helps to enter a new market or gain new market share. In the time of introducing a new product into the market,the pricing strategies of the product is plays important role. So the companies use pricing strategies.