Question 2
Penetration Pricing: a Penetration pricing strategy is the strategic application practice of settling an initial price that is far lower than the projected standard price for the product. The strategy is essentially also know as a price war. This strategy goes for the lowest and deepest price cut, to ensure that the product at any given time in the market has the lowest price compared to its competitors. The business would only use this strategy if they need an exceptionally low price to draw attention to their product or to fend off competitors. Because this is a new product and there are no competitors, this strategy won’t be suitable. This strategy more suitable during products growth phase, especially if a brand name already has a positive reputation.
Competition / Competitive Pricing: This strategy focus on charging a price that is comparable to other brands selling the same product. …show more content…
This strategy is used to maximize profits for products where the consumers are content to pay more, especially where there are no substitutes in the market for the particular product. If the barriers to entry in the market is high, or when the seller cannot afford to save cost through producing the product at a high volume. This pricing strategy can also be used to enhance the brand identity of a product in a particular market. A unique product like the Seasonal Fresh Corn, most likely have the best change or commanding a premium price, especially in a new market. This is one of the pricing strategies the student would recommend. Some brands can continue to following a premium pricing strategy because their entire brand image could be based around luxury. There is a prevailing perception among consumers that the product is a luxury product and that Organic has unusually high quality products or a unique product
Penetration Pricing: a Penetration pricing strategy is the strategic application practice of settling an initial price that is far lower than the projected standard price for the product. The strategy is essentially also know as a price war. This strategy goes for the lowest and deepest price cut, to ensure that the product at any given time in the market has the lowest price compared to its competitors. The business would only use this strategy if they need an exceptionally low price to draw attention to their product or to fend off competitors. Because this is a new product and there are no competitors, this strategy won’t be suitable. This strategy more suitable during products growth phase, especially if a brand name already has a positive reputation.
Competition / Competitive Pricing: This strategy focus on charging a price that is comparable to other brands selling the same product. …show more content…
This strategy is used to maximize profits for products where the consumers are content to pay more, especially where there are no substitutes in the market for the particular product. If the barriers to entry in the market is high, or when the seller cannot afford to save cost through producing the product at a high volume. This pricing strategy can also be used to enhance the brand identity of a product in a particular market. A unique product like the Seasonal Fresh Corn, most likely have the best change or commanding a premium price, especially in a new market. This is one of the pricing strategies the student would recommend. Some brands can continue to following a premium pricing strategy because their entire brand image could be based around luxury. There is a prevailing perception among consumers that the product is a luxury product and that Organic has unusually high quality products or a unique product