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Are
pricing strategies important for a company to be successful? Why/Why not?
OUTLINE:
1.
Economic aspects
a.
Higher sales: Apple iPhone: Value-based
pricing strategy
b.
Higher prices for future
products: Apple iDevices
2.
Prestige
a.
Positive feedback from
customers: Rolex
b.
Popularity in the market/among competitors: Wall-mart: Cost-based pricing strategy
KEY: TOPIC STANCE(OPINION) MAIN IDEA SUPPORTING IDEA
There are so many aspects that a company should pay attention to in
marketing process. It might start with the time even before a company launches
a product and continues with which strategy to choose before starting to sell
them, and this process never ends even after a company has sold its products to
consumers. Considering this process, one of the important steps is planning how
to introduce and sell the product in the market. Of all these components, choosing
the price for the product has an utmost importance since one of the significant
aims of a company is to make a profit not a loss. Therefore, it is possible to
claim that choosing the
right pricing strategies is highly vital for the firm to be successful especially due to its
effects on the economic
conditions and the
prestige of a company.
Initially, pricing
strategies may certainly be considerable especially in terms of a company’s economic conditions. The
first observable benefit
of choosing the right
pricing strategy is its considerable benefit on the sales of company. Since this can directly
affect the profit, companies, while deciding on pricing strategies, should
always try to come up with a creative idea. For instance, although iPhones, a
brand name of mobile phones produced by Apple, are told to cost around 50-100
dollars, Apple uses value-based pricing strategies, and the company knows that
people desire to have one of their iDevices by paying more than a few hundred
dollars. Since it creates a high quality image in people’s mind, it can be seen
that iPhone is the best-selling mobile phone brand when compared with other
ones. Moreover, when a company projects its own image like this, and when it is
associated with quality, popularity or a kind of fame, people tend to buy other future products by the
same company by paying a similar amount of money. To illustrate, Apple is not
only famous for its mobile phone brand, but it also sells other iDevices such
as tablets, IP TVs, and accessories at similar prices, which make the company
even more profitable. As a result, choosing the right pricing strategy, even if it is far higher
than the real cost of the product itself, always helps a company to make a considerable profit thanks to its guaranteeing higher sales and
similar prices for future
products.
In addition to its effect on sales, choosing the right pricing strategy might also help a company to become prestigious.
Quality of a product always comes first, and when it is also reinforced with the positive feedback received from
customers thanks to
pricing strategies, a company can become really successful. For
instance, Rolex is a luxury Swiss watch brand, and it is one of the most
expensive ones on the market. Marketers and economists claim that Rolex is a
quality brand; however, what makes it even more high quality is the price as
well. Some claim that if Rolex watches were sold at a lower price, it would not
be as prestigious as it is now. It is possible to understand this when the
feedback and customers’ comments are taken into account, and there is no
customer who is so unhappy or disappointed to pay such an amount of money for
these watches. Additionally, choosing the right pricing strategy is the factor which makes a company popular among other competitors.
Wal-Mart in the USA is a brand name of a retailer that sells all types of goods
at a lower price. Since the company can both manufacture items and sell them in
its own stores, it uses cost-based pricing strategy and sells its products at
really good prices. As a result, this company is one of the largest retail
chains around the world and best known for its price and quality. Therefore, it
is possible to conclude that the right pricing strategy could bring prestige for a company both positive feedbacks from customers
and thanks to its popularity
in the market.
All in all, the
importance of pricing
strategies for a company is an unquestionable topic. As also mentioned
above, there could be lots of benefits of choosing the right strategy for a particular
product. One of the leading advantages
is its economic aspects
which refer to higher sales,
prices and of course a
higher profit. Another
benefit is related to how it can help company become prestigious thanks to feedback from customers
and its popularity among
competitors. Therefore, the more carefully companies consider pricing
strategies, the more benefits they will have during their operations.
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