React to Janet’s statement.
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price strategy establishes a long-term pricing framework for a good or service. The three main types of price policies are price skimming, penetration pricing, and status quo pricing. A price-skimming policy charges a high introductory price, often followed by a gradual reduction. Penetration pricing offers a low introductory price to capture a large market share and attain economies of scale. Finally, status quo pricing strives to match competitors’ price. |
Explanation
Reaction.
Charging your products similar to competitors' prices has several consequences. First, it prevents one from gaining a competitive advantage over competitors. Although this strategy might be successful in the short run, it is not sustainable in the long run. The business will make sales but will not grow and expand more to overshadow other key players in the market.
Additionally, it hinders the company from establishing its brand trough positioning. Positioning entails the consumers' perception of the brand of a company in the market. Each business must strive to establish its brand as unique as possible to attract more consumers. In this case, setting similar prices to those applied by competitors makes the image of the company unrecognizable because it is perceived as similar to others. Consumers are likely to make purchases from any player due to poor brand position.
Most importantly, the company needs to set prices using the competitors' prices as bases to gain competitive advantage and promote brand poisoning. More precisely, the price should be relatively lower than the competitor's to attract more customers. Once this has been established, consumers will shift their attention to the low prices hence allowing the business to outdo its competitors. Therefore. Janet Oliver should adjust down her prices to attract more customers, gain competitive advantage, and promote its brand.
References.
Al-Shakhsheer, F. J., Habiballah, M. A., Al-Ababneh, M. M., & Al-Sabi, S. M. (2017). Financial implications of competitive pricing strategies: evidence from the Jordanian hotel industry.
Answer
Introduction.
Setting the right price plays a significant role in promoting the brand of a business. The aim of this assignment is to describe the procedure for setting the right price based on the reflection of Janet Oliver's pricing strategy.
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