Week 4 Discussion 1
“Pricing Policies and Buyers” Please respond to the following:
- For an industry of your choosing, pick one of the buyer types (value-driven, price-driven, brand-driven, and convenience- driven) and one of the reasons to create pricing policies (price objections, price increases, economic downturn, and promotional pricing).
- Predict how the buyer type you chose would react if the reason for creating the pricing policy suddenly changed. Support your prediction with information from the textbook.
AND RESPOND TO THESE POSTS:
RE: Week 4 Discussion 1
Valued driven buyer focuses primarily, though not exclusively, on the value. It’s beneficial to the organization since when successfully used, it improves the profitability due to the higher prices charged. The buyer has driven emotions regarding fashion. It triggers value-based pricing whereby pricing is as per the benefit perceived from the product. It’s predicated upon the understanding of the customer value.
Pricing strategies, as well as pricing of the products, constitutes one of the crucial aspects affecting decision making as well as building the company’s image.
Promotional pricing could be applied. It involves reduction of prices of the products or services to indefensibly low levels. The strategy is used to penetrate a given market which is highly competitive.
To value-driven buyer changes in prices would not be an important factor to consider. It may not affect their consumption. Instead failure to the commodity or service not meeting their expectation or needs, it will highly and negatively affect their purchasing trends.
RE: Week 4 Discussion 1
I pick the car industry. When customers are shopping they are mostly looking at the price of the car and not the features. One important decision companies face is setting prices. The three major pricing strategies are cost-based pricing, competition-based pricing, and customer driver or customer value-based pricing. Customer-driven pricing is the practice of setting prices according to customers’ perceived value of a company’s goods or services. I believe automakers and dealers must focus on transforming the overall customer experience and ultimately develop into a trusted organization. An integrated customer experience strategy is key to building loyalty, retention, and consequently higher profit margins in sales and after sales. In order to transform a customer from a buyer to a brand advocate, trusted relationships need to be built by injecting trust-building attributes into every customer interaction. For automakers and dealers to continue to be relevant, it will be critical to create value propositions that help customers tailor their mobility packages. This could involve offering choices ranging from buying vehicles to designing a package involving access to multiple vehicles and modes of transport. Thus, the focus shifts from the experience of driving the vehicle, to experiencing the brand. In addition, with regulations pushing for greater competition from independent repair market, an integrated aftersales value proposition may be the only way to create repeat customers.