Pricing Strategies of Organisations Essay Example | Topics and Well Written Essays - 2500 words

Pricing Strategies of Organisations - Essay ExampleWith this free in pricing strategy, Whirlpool was competent to redefine the washing machine industry and identify natural markets and segments within it (Gregson, pp. 85-87, 2009 Ferrell & Hartline, pp. 47-49, 2008). Market Skimming Consider the example of Sonys first High Definition picture (HDTV) in the Japanese market introduced in the yr 1990. Sony initially priced it with 43000 US dollars but by the rarity of the year 1993, the alike HDTV with similar features was being sold for almost 6000 US dollars. By the year 2004, a 42-inch HDTV had a price tag of only 1200 US dollars in the Japanese market. What Sony was act to do here in Japanese market is known as price skimming or Market skimming price in the language of marketing. When companies introduce new, technologically advanced and better products, they measuredly charge very high prices for those products (Gregson, pp. 85-87, 2009). Usually, extensive promotion and hy pe is make upd in the market about the product, which create a very high demand. Further more(prenominal), the unit costs of producing small volumes ar non so high. This allows the organisation, not only to keep the competitors out of the market but at the same time, the high price communicates the contentedness of luxury, uniqueness, and superiority of the product. By starting with the highest possible price and gradually decreasing it over a period, the beau monde is able to skim all the revenue layers of the market (Zhang, pp. 36-39, 2005 Kurtz, MacKenzie & Snow, pp. 325-326, 2009). Important here to note is that with this method, the company is able to target all the segments and markets. With high initial prices, the company targets the market of less price sensitive customers who are willing to pay... This essay approves that many airlines in the airline industry use dynamic pricing strategy, which is another(prenominal) form of price discrimination. Under the umbrella of dynamic pricing, airlines charge unalike fares to the different customers during peak and wrap up peak seasons, for advanced bookings, for last minute bookings and thus fares vary for different times of the day, different eld of the month and different seasons. In fact, there are all chances that two people who are change of location through the same flight may have paid different fares for the same flight with the same benefits. Important here to note is that this kind of pricing not only allows the company to earn rough extra revenues during the peak hours, days and seasons but it also give ups up in increasing tourism in those areas. However, important here to note is that these are the low cost carriers who use aggressive forms of dynamic pricing. This study makes a conclusion that pricing strategies play a crucial and imperative role in targeting different markets. Companies and managers, which are aware of the potential of pricing strategies to target different market s, are able to generate more business and revenue for the company. However, as mentioned earlier in the paper as well that much term and thought must be put into the pricing strategies to target different markets because an incorrect pricing strategies may not even end up tarnishing the image of the company but it may also end up putting the company into losses