Pricing Decision Essay

Companies in their endeavor to succeed in the highly militant and dynamic market be now considering a clear focus on their marketing strategies. This is in tramp that they may remain relevant in the fast changing personal credit line environment, market conditions and consumer preferences. It is of the essence(p) that a confederacy considers the effects of the changes in the transmission line environment including price variations initiated by its adversarys This is beat out through with(p) by first analyzing the prices offered by the competitors visa debate the guilds embody structure and the competitors chances to change in response to the familys new price offers (Kotler 2003.p 66). set Strategies The company require to figure out the best strategy to implement in order to get to the optimum prices for its products. To initiate cost-cutting with a view to better on the profitability of the company the company mustiness have an witnessing of the type of cost that it needs to manage. This will be to a large finish influenced by its style of management, sources of professional advice, the broader vision of the companys goals, communication strategy, and companys capisation in relation to debt-equity ratio and the cost of get (Sherman 2007. p 3-4).The company also needs to understand the several types of costs that it incurs. The various types of costs are research and development costs, the overheads and administrative costs, human capital costs including health care costs, salaries and employee do goods, infrastructure and body costs, advertising and promotional costs, fixed and vari qualified costs, and debt-servicing costs. The foot line is to thoroughly examine each of these cost categories and weigh their importance to the companys business operations, consider more efficient available alternatives, and the manageable implications of the cost reduction strategy (Sherman 2007.p5 &9). A company such(prenominal) as Wal-Mart that has for years been ahead of its competitors by offering the lowest prices for its goods. Wal-Mart is able to manage lucky price cuts by implementing price cut strategies such as endeavoring to reduce its costs by engage a tax reduction strategy. This has been through its investments in Real Estate Investment Trusts (REITs) in order to exploit tax loopholes and avoid some of the taxes levied in particular states (Moore 2007. p. 2). Having accomplished the above cost reduction strategy, the company may the come up with leave set for its products.This is done by first dread price methods. There are six pricing methods that would lead to an informed decision in fix prices. These are markup pricing method, the target return pricing method, perceived value method of pricing, value ground pricing, the going-rate method of pricing and the sealed-bid method of pricing (Kotler 2003. p 66). Implications of Price Cuts and Conclusion The price of the product or service is a major factor that influences customers purchase decision is the marketing mix.A combination of the cost reduction strategy and an capture pricing strategy is more likely to benefit the company and enable it attain a agonistical advantage over its competitors. By adopting market responsive cost cutting strategies in the communication industry, companies in turn helped create a better sort of life whereby customers are now able to circulate more often and at lower prices Salazar 2007. p. 1). This translates to increase profits to the service providers as they are able to sell more units than before. References Kotler, P. (2003). Marketing Management. 11th Ed. rude(a) Jersey Prentice Hall. Moore, M. (2007). Taxing Strategies Always in the altogether Prices, Wal-Mart Attempts to Rollback Taxes. Retrieved March 8, 2009 from http//walmartwatch. com/img/blog/NIMSP_tax_strategies. pdf Salazar, L. C. Cost stinger Strategies at the Bottom of the Pyramid. Retrieved March 8, 2009 from http//www. lirneasi a. net/wp-content/uploads/2007/03/2-lcs-shoestrings-sing-28feb07. pps Sherman, A. J. (2007). Strategies for slash Costs and Improving Profitability. Retrieved March 8, 2009 from http//www. sbecouncil. org/uploads/PPT%20Cost%20Cutting%20for%20Growth%20and%20Profitability. ppt