Product Pricing Strategy Essay Example | Topics and Well Written Essays - 1250 words

Product Pricing Strategy - Essay Example Hence, it is very important that the organization should know all their costs in developing the products and in their marketing & inventory holding. Once the internal thresholds are known there are multiple additional factors that drive pricing decisions from market perspective. Monroe and Bitta (1978. pp414) presented a consolidated view of multiple models of product pricing decision classified as - new product models, product line models, price change models and price structure models. The indicated their choice for market comparisons based pricing - like related products, volumes in demands, number of discounted units, price differential with competition, etc. These factors have been empirically accepted by product strategists in pricing their products. However, the author agrees with a new theory presented more recently in 2000 by Thakur and Nair et al. (2000. pp90-92) on product pricing stating that products should be priced based on consumer preferences and not by the actual pr ices or consumer budgets. They reiterated that the products should be offered with the characteristics preferred by customers kept above thresholds and priced based on maximum welfare model such that consumers having wide variations of income can afford the product. This is particularly prevalent in automobile and consumer durables markets. Armstrong (1996. pp51-52) argued that prices should be kept variable as per customer preferences such that premium customers buying larger quantities are offered lesser prices and standard customers buying lesser quantities are offered more prices. However, it is observed that when customer preferences are combined with inventory levels, companies tend to increase prices irrespective of whether the customers are premium or standard. There are some concerns in such models that the author presents in the next section. Ethical considerations and other concerns in product pricing Ethical considerations are specifically required to be considered in monopolistic product pricing when dynamic pricing is carried out with fluctuating demands combined with inventory levels. Elmaghraby and Keskinocak (2003. pp1288-1289) discussed that, empirically, dynamic pricing has been one of the best practices in products and services due to change in customer demands (like urgent deliveries needed) or change in inventory levels (less inventory of products in more demand). This strategy is largely prevalent in service industries - like Airlines, Hotels, Transportation, etc. From the ethical perspective, the author hereby argues that dynamic pricing should not be carried out for essential commodities like food, clothes, medicines, healthcare, hospital beds, etc. Some companies increase prices substantially as soon as they witness customer orders with urgency. There are theories in operations research to maximize profits by taking urgent supply orders from customers at premium pri ces (example, Levin & Ma. 2004. pp217). While it may be a good practice to service customers with urgent

Elise Smart's Problem Essay Example | Topics and Well Written Essays - 1000 words

Elise Smart's Problem - Essay Example As the discussion highlights the various factors that influence sustained performance (ability, motivation, resources, role clarity, reinforcement) are examined, as well as steps leaders can take in improving performance of those for whom they are responsible. Since Elise Smart was so sure about the rating of Ketchum, Elise will suggest that Ketchum will undergo further training and understanding of her position in the organization. Because of the appraisal that she was getting Darlene Ketchum maybe is assuming that she is still doing the right thing. But Elise Smart sees it in a different way. Ketchum is no longer functioning as what she was before. Maybe because of several factors the performance of Ketchum declines without her knowing it. Elise Smart must show proof and facts that her observation on Ketchum performance is valid and accurate. This study outlines that the case of Elise Smart in the Milleneum Insurance are quiet tough. Smart must be able to show proof and facts that Darlene Ketchum deserves to have a very low appraisal such as data on poor performance and other mistakes that Ketchum has committed to correlate it with Elise’s report. It will be hard for Smart to convince the organization since Ketchum was appraised before as to be one of the excellent employees of the company. The problem is how will Smart will be able to show that her assessment and observation to Ketchum is valid. In the company during appraisal Elise need to discuss the assessment made to Ketchum and she will sign the assessment form. The problem of Elise is that whether Darlene Ketchum will accept the evaluation or not. How will Elise show the appraisal if Ketchum still assumes that she will have the excellent rating? Darlene Ketchum needs to sign the said evaluation before Elise Smart will be able to forward it to the vice-presid ent.