We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Pricing Strategy - Case Study Example

Comments (0) Cite this document
Name: University: Course: Tutor: Date: Every organization is faced by dilemma on how much to charge for the product it is offering to its customers. According to economic theory, demand is a function of price, therefore; customers will consider the price of the product before purchasing the product…
Download full paperFile format: .doc, available for editing
Polish This Essay91.2% of users find it useful
Pricing Strategy
Read TextPreview

Extract of sample
"Pricing Strategy"

Download file to see previous pages Pricing must show a positive correlation with other elements of the mix so as to achieve the objectives of a firm. In addition, pricing is complex as it must imitate the demand and supply relationship of the product. Firms need to charge a fair price, since charging too high for the product or too low might lead to reduction in sales for the organization thus reducing the profitability of the organization. Therefore, there is a need for the hotel to consider the profit factors in determining the price of the product. In this case, the profit factors includes; the objectives of the company, variable and fixed cost associated with the product, the targeted market and willingness and ability to pay, the competition environment prevailing in the industry and planned positioning strategies (Smith and Smith 271). In the consideration, of the above classification, the place or rather the location of the hotel is vital for pricing. Avira hotel is strategically situated, where in the neighborhood there various tourist attraction site thus offering the possibility a wider a market. Also, the hotel operates from an area which is close to the airport, bank and various garden as well as other recreational areas. This implies that the many of the customers are individuals who have a higher willingness ability to pay; therefore, the price must reflect this consideration (Smith and Smith 282). The strategic positioning in an area where there demand of the hotels implies the price charged by the hotel must reflect the supply constrain, since there are only five-star hotels in the area, while the number of the customer is higher. This implies that demand is considerably high since it is only in the month may that the hotels products experienced an average of about 50% occupancy this justifies the move by the hotel review it price so as to reflect this relationship (Smith and Smith 289). Another pricing strategy showcased in this case is the level of competition in the hotel industry in the region. There are only five-star hotels serving a wide, thus, the completion between the hotels is not intense as demand is in excess of supply. This implies that, for a hotel to be more competitive than the other hotel so that it can control the large proportion market, therefore, they must consider the pricing strategy so as to maximize on large production thus benefiting from the economies of scale. In respect to competition, the customers consider the utility they derive and compare this to the price that they pay for the product. It is evident that the price that Avari hotel is slightly higher than that of its key competitor Pearl. Usually consumers will pay higher for a commodity if they think that the commodity is superior as compared to the others. In this case, when Avira lowered its price in the month of November lower than its competitors Pearl; that is pearl charges $1065 and Avira $1000. Pearl occupancy level rises to 80% as compared to 70% Avira. This has the implication that consumers equate the price they pay to the utility or satisfaction they derive from consuming these products. Avira also utilizes premium pricing, where it charges higher prices for its products to show the how its product is exclusive as compared to the product offered by other firms and especially competition. This case can be delineated by the ever higher price charged by Avira as compared to Pearl. In addition to this, the ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“Pricing Strategy Case Study Example | Topics and Well Written Essays - 750 words”, n.d.)
Pricing Strategy Case Study Example | Topics and Well Written Essays - 750 words. Retrieved from https://studentshare.org/management/1437283-pricing-strategy
(Pricing Strategy Case Study Example | Topics and Well Written Essays - 750 Words)
Pricing Strategy Case Study Example | Topics and Well Written Essays - 750 Words. https://studentshare.org/management/1437283-pricing-strategy.
“Pricing Strategy Case Study Example | Topics and Well Written Essays - 750 Words”, n.d. https://studentshare.org/management/1437283-pricing-strategy.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document
Ikea case study
Ikea President Josephine Rydberg-Dumont asserts that the “shopping experience is something that is exciting and talks to many different people.”1 Ikea makes shopping exciting because of its low prices and because people know that Ikea offers quality products too.
3 Pages(750 words)Case Study
Product & pricing (marketing management)
However, despite dissipating figures, TiVo is capable of turning into a viable and profitable project in future even though it chooses to align with DirectTV. TiVo management made good use of Ansoff's growth model by applying New Markets Strategy involving market development and diversification.
6 Pages(1500 words)Case Study
Logitechs Quality of Strategy
"That's why we could grow through great products that people want to buy in the cordless, video, game and audio sectors," he also added. Logitech International is the worldwide leader in the market for computer peripherals, founded in Switzerland in 1981, Logitech designs, produces and markets products that offer access to the digital world.
11 Pages(2750 words)Case Study
Pricing Tourism Services
So the attitude of the people to price must be ascertained first. Secondly the comparative advantage that Sydney in particular has over Brisbane has to be taken into consideration. Demand for and supply of a product depend on a number of endogenous and exogenous variables.
8 Pages(2000 words)Case Study
LOVE Case - Mednet.com
Cholesterol.com is a specialized medical information website that concentrates on one specific disease. The website has diagnostic features. This tool is very popular among viewers of the website. Mednet.com differentiates its content by
2 Pages(500 words)Case Study
Pricing Strategy (Case Study: Haier in India)
strategy where they would have a local goods production, set up a sales strategy and also produce products that would be able to cater to the needs of the local present. Over a quarter of a century has passed through which Haier has evolved from an unknown refrigerator factory
4 Pages(1000 words)Case Study
Advance marketing strategy
The key facts in the case that sets the stage for the CEO include the store closings, sales malaise, declining market share, slumping earning and weak market performance (Kerin et al, 2009). They were
10 Pages(2500 words)Case Study
Freemium pricing at dropbox case study
The goal was to convince the clients to use and appreciate it. This will enable people to get their employers to sign up the service. The company hoped to achieve this by giving people ways in trying the
2 Pages(500 words)Case Study
Alternatively, the main goal was to offer users with incentives, which would be important for sharing the product with employers and friends in exchange for additional storage space in
3 Pages(750 words)Case Study
Pricing Structure- ABC Costing System
However, this service only benefited their large clients and the small and medium type clients were sidelined. So the case study basically looks at the business strategy of the company where the intention is to benefit the “formula plus” plan for all of its existing
5 Pages(1250 words)Case Study
Let us find you another Case Study on topic Pricing Strategy for FREE!
Contact us:
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us