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Pricing Structures the Company Has Term Paper
Pages:3 (782 words)
Subject:Marketing
Topic:Sports Marketing
Document Type:Term Paper
Document:#28649819
This virtually means that the company's reputation could suffer demises.
Telemarketing efforts are often constructed on impulse buys and psychological pricing, such as $19.99 instead of a round $20.00 or a "limited offer" deal in which the price is reduced from $30.00 to $19.99. This context makes the psychological pricing strategy suitable for the company.
4. Product-line Pricing
Advantages:
Sets a single unique price on all products coming from a product line, reducing as such the complexities which come from setting different prices and using differentiated strategies for each product category
Pushes towards the lowest retail price possible and generates as such customer satisfaction. Additionally, through increased consumer satisfaction, higher levels of volume sales are generated.
Disadvantages:
Damages the organizational productivity and profitability
Denies the existence of differences between the products
Forces down the quality of the items by strengthening on the importance of a low retail price
The prioritization of the low retail price on the product line damages the product and the consumer by reducing the quality of other components
Given the nature of the products the company manufacturers -- sports apparel for both males and females --, as well as the complexities of the combined distribution channel, the product line pricing strategy does not seem the adequate strategy to select.
5. Promotional Pricing
Advantages:
Increases the appeal of customers to the product
Generates high volumes of sales and reduces the amount of time until the breakeven point is reached
Generates positive publicity and familiarizes the customer base with the product
Has the ability to advertise the apparel products and create future demand
Disadvantages:
The benefits the promotional pricing strategy generates are generally short lived
Eventually, a situation can be reached in which the volume of sales and the profitability are only maintained when promotional sales are implemented, but prolonging these prices would subsequently reduce profitability.
In light of the analysis conducted, it becomes obvious that the most suitable pricing strategy to be implemented by the firm is a combination of psychological pricing and differential pricing. These two pricing structures best respond to the…
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