Pricing Strategy Essay

To furbish up a pricing strategy, at that place are number of steps taken into consideration as followsStep 1 Our pricing objectives are to maximise market share and increase gross revenue volume. This strategy go away be used when TrackR is being launched into the market. We charge a reasonable monetary value in order for TrackR to be accessible in the market as promptly as possible and withal to encourage the interest and excitement of a product. Because of the low price, we are able to raise the sales volume easily, maximise the market share and reach the economic of scale as in brief as possible. In order to boost the sales even more, we get out offer promotion followed by the product launch, which will later be discussed in the later section. Eventually, we mountain penetrate the market and create fault awareness.Step 2 Being a monopoly of TrackR, we have a fix power of controlling price and quantity, but before we set a final price, we must observe the demand. Trac kR tush be classified as familiar goods for specific groups of people. While the price remains un limitingd, people tend to vitiate more normal goods when their income increases and they less correspondingly to buy normal goods when their income falls. TrackR is price elastic meaning consumers are responsive/ sensitive to a change in price. If we decide to elevate the price of TrackR, the quantity demand will be declined.Step 3 We also need to estimate the be associated with TrackR. All follows can be broken down into 2 categories fixed costs and variable costs. Fixed costs include salary, rent, PR and promotion and sales promotion, which come down to 3 million tical per month while the variable costs comprise of unit cost, conveyance fee and exchange rate which are 375 baht per unit.Step 4 Analyzing competitors costs, prices, and offerings. Our competitors can potential differencely be online retailers, for example, eBay or Find my iPhone.TrackReBayFind my iPhone bell?$25 8 00 bahtFreeCostNo additional costShipping fee + dutyOfferingWarranty, ServiceNo after(prenominal) sales serviceApple products onlyStep 5We furcate our consumers into 2 segments B2B and B2C so we will use different strategies to different potential buyers. For B2B buyers, we will sign a contract and sell them over a large volume at a reasonable price eye socket regarding the numbers of unit purchased. By having cost advantages over competitors as you can see on the previous slide, we are able to build up a barrier protecting us from new entrants entering the market.On the former(a) hand, as we aim to achieve our objective of increasing the sales volume, we set an affordable price making it accessible to B2C consumers so we can increase the sales volume and eventually achieve economic of scale.We vex using value based pricing approach for twain buyers, which sets prices in the main upon the value perceived/estimated by the consumers rather than the costs of the product. In other words, value based pricing is a valuation of good or service according to how much consumers are willing to pay. We have through with(p) a market survey to see at what price consumers would like to spend. It could be somewhat arbitrary but it greatly assistances in an efficient marketing of product in understanding impact of good or service has on consumers.We then use break-even analysis, which represents a point at which total cost and total revenue are equal there is no loss or gain at this point. It purposely uses to understand the minimum output that must be reached in order to lead a profit. It is a rough indicator of a marketing activeness and also provides a dynamic view of relationships between costs, sales and profits.We also use quantity discount for B2B purchaser, which is an incentive offered to our potential purchasers resulting in a reduced cost per unit of goods when acquired in a greater volume. A quantity discount will be proposed to tempt our buyers to purch ase in larger quantities. Step 6 Now, we have come down to a conclusion of TrackRs final price. Here are the base prices for both B2B and B2C buyers.