Pricing Decision Essay Example for Free

set Decision EssayCompanies in their endeavor to succeed in the highly war-ridden and dynamic market are now considering a clear focus on their marketing strategies. This is in night club that they may remain relevant in the fast changing origin environment, market conditions and consumer preferences. It is weighty that a friendship considers the effects of the changes in the business environment including price variations initiated by its contenders This is best through with(p) by first analyzing the prices offered by the competitors visa vie the companys cost structure and the competitors chances to change in response to the companys new price offers (Kotler 2003. p 66). Pricing Strategies The company needs to figure out the best strategy to implement in order to achieve the optimum prices for its products. To initiate cost-cutting with a view to improve on the profitability of the company the company must have an go throughing of the type of cost that it needs to ma nage. This will be to a large extremity influenced by its style of management, sources of professional advice, the broader vision of the companys goals, communication strategy, and companys greatization in relation to debt-equity ratio and the cost of borrowing (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 emoluments, infrastructure and system costs, advertising and promotional costs, fixed and variable costs, and debt-servicing costs. The female genitalia 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 possible implications of the cost simplification strategy (Sherman 2007.p5 9). A company such as Wal-Mart that has for y ears been ahead of its competitors by offering the lowest prices for its goods. Wal-Mart is able to manage approbative price cuts by implementing price cut strategies such as endeavoring to reduce its costs by move 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 appropriate pricing for its products.This is done by first reasonableness pricing methods. There are six pricing methods that would lead to an informed decision in regular prices. These are markup pricing method, the target return pricing method, perceived value method of pricing, value establish 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 appropriate pricing strategy is more likely to benefit the company and enable it attain a competitive advantage over its competitors. By adopting market antiphonal cost cutting strategies in the communication industry, companies in turn helped create a better flair of life whereby customers are now able to communicate more often and at lower prices Salazar 2007. p. 1). This translates to change magnitude profits to the service providers as they are able to sell more units than before. References Kotler, P. (2003). Marketing Management. 11th Ed. bare-ass Jersey Prentice Hall. Moore, M. (2007). Taxing Strategies Always groovy 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 Cutting Strategies at the Bottom of the Pyramid. Retrieved March 8, 2009 from http//www. lirneasia. net/wp-content/uploads/2007/03/2-lcs-shoestrings-sing-28feb07. pps Sherman, A. J. (2007). Strategies for Cutting Costs and Improving Profitability. Retrieved March 8, 2009 from http//www. sbecouncil. org/uploads/PPT%20Cost%20Cutting%20for%20Growth%20and%20Profitability. ppt