Assignment
Read through the below post and provide any on of the following: APA format 250 Words.
· Ask a probing question, substantiated with additional background information, evidence or research.
· Share an insight from having read your colleagues' postings, synthesizing the information to provide new perspectives.
· Offer and support an alternative perspective using readings from the classroom or from your own research.
· Validate an idea with your own experience and additional research.
· Make a suggestion based on additional evidence drawn from readings or after synthesizing multiple postings.
Post:
Marketing is the performance of business activities that direct the flow of products and services from producer to the client. It's the activity that directs to satisfy the human desires through exchange method. These activities are divided into four teams for product and seven teams for services. These components are product, price, promotion, placement of product and 3 extra components for services are a process, people, and physical proof. Let's discuss how marketing research can help any company develop a Solid Pricing Strategy. From my experience as a Commodity Manager, for some products, a price sheet is released that helps you understand the market pricing for the same or similar product though suppliers often discount on the bases of volume, agreements, quality, client relationship, or other criteria's.
One of the renowned and advanced market research technique/tool is the Van Westendorp Price Sensitivity Analysis also known as PSA. PSA determines a range of acceptable prices and an optimal price point based on an analysis of price or value rating (Lipovetsky, 2006). The analysis is based on responses to four questions:
At what price do you think this job would be a good value?
At what price do you think this job is expensive but still worth considering?
At what price do you think this job is so expensive you would not consider buying it?
At what price do you think this job is priced so low that you would think the quality couldn't be very good?
After gathering the answers from the survey, we are able to graph each of the pricing curves and could determine the points at which the curves intersect. These intersections determine the optimal pricing ranges as:
PMC: Point of Marginal Cheapness: This point will help us determine that at what price does this product become too cheap, that is, so cheap that you would question its quality and not buy it?
OPP: Optimal Price Point: This range represents the prices at which the product can remain viable. It is determined at the low end by the intersection of the "too cheap" and "expensive" curves, and at the high end by the intersection of the "bargain" and "too expensive" curves.
IPP: Indifference Price Point: is the price at which an equal number of respondents consider the product to be a bargain vs. expensive. To find this use the intersection of the "bargain" and "expensive" line.
PME: Point of Marginal Expensiveness: At what price does this product start to 3 LIPOVETSKY seem expensive to you? (Isaacson, 2013)
Van Westendorp pricing questions offer a simple, yet powerful way to incorporate price perceptions into pricing decisions.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.
References:
Lipovetsky Stan, June 2006. Van Westendorp Price Sensitivity in Statistical Modeling, Volume 12, Number 2
Bruce Isaacson, March 2013. Why You Should (Almost) Never Use the van Westendorp Pricing Model.