Samat pricing Essay Example | Topics and Well Written Essays - 750 words

Samat pricing - Essay Example Buying the product through an infomercial and shopping at the store both provide different channels for the same product. Purchasing an item on a website would be another channel a company could use to differentiate prices. ‘Regional pricing’ refers to the practice of pricing items differently in different regions, sometimes to better match local economies. Often cars are priced by regional pricing, and a person may pay more or less for a vehicle depending on the town, or even the country, in which they live. Anyone who has watched a home shopping network knows what ‘time based differentiation’ is. It is the practice of charging a different price based on how quickly a consumer gets an item or the length it takes to provide a service. Sometimes, if you â€Å"order now!† you’ll get a discount, or you may pay more if you ask for overnight shipping. When it is not possible for a company to use other sorts of price differentiation, ‘product v ersioning’ is a tactic that is sometimes used. The company creates slightly different ‘versions’ of the same product in order to adjust price by region or price sensitivity, justifying it by saying that it is a different version. The Apple corporation is known to do this sometimes with their ipod line. If the customer is unfamiliar with the features provided by the device, the company can simply repackage it into a slightly different package, and call it a new version, justifying any price changes they wish. Oftentimes, a company will offer coupons or rebates as a customer incentive. These are often beneficial financially to the company for several reasons. If a customer has a coupon for a particular item, they may go to a store they do not usually frequent to redeem it. This gets people in the door who may purchase additional items than the one they intended to come for. Also, in the case of rebates, since the customer must send them in after purchase and some l ose them or forget, this can sometimes lead to greater company profits. SECTION 2 Through the use of dynamic pricing, demand can be shifted from one period of time in a quarter or sales period to another. As available capacity increases, a shift is made in the product to another quarter by a changing the price. Through this practice, the company can attempt to predict the overall demand for their product. If sales are an uncertainty, a company may want to increase prices so that product manufacturing is controlled. This way, they do not create more supply than demand. Demand can change by season, and should be considered a variable. SECTION 3 The strategy of the Coca Cola Corportation was successful because it allowed the company to increase profit margins on days with a higher temperature. Consumers may have felt differently if they had realized that Coke was capitalizing on their thirst, and the heat, a factor that they the customer could not control. Some may have felt that they were being taken advantage of in this way. This example of price gouging was effective because the consumer at large accepted the situation and was unaware of the practice, they just knew they wanted their sodas. SECTION 4 [I WASN'T SURE THAT YOUR ANSWER TO THIS WAS ACTUALLY CORRECT, SO I TOOK THE LIBERTY OF REWRITING IT. IF YOU LIKE IT, PLEASE USE IT, IF NOT, DELETE THIS AND GO BACK TO YOUR PREVIOUS WORK.] In the case of the clothing company, Zara, they utilize a time sensitive outsourcing strategy. They outsource lines of clothing that are still selling, but