Pricing Objectives & Strategies - Essay Example

Setting prices for the products and services is a very difficult art sometimes as your pricing strategy clearly signals to your s, your strategic vision and direction. Since we are just entering into a new market therefore our pricing will be based on keeping in view the different options available to us. Overview of the Product The product which we are going to launch is the process sea food. This product will be basically based on the processing of sea food items like fish, crabs etc to the UAE market.

We will be selling our product based on our quality and freshness. This will be achieved while keeping in view the element of value addition in mind since sea food being a generic commodity; we believe our unique selling proposition will be value addition. Pricing Objectives & Strategies Price setting is on of the delicate arts which organizations has to perform in order to get back what is put into the product by incurring costs and investments into producing goods and services. From the marketing perspectives, setting prices or rather executing the pricing strategy is more of a control variable rather than an industrial organizational experiment.

(Oren, 1984). As discussed earlier, we are targeting two consumer niches. One is the hospitality sector of UAE and other is the common end users who make purchases for the home. I.e. Women. In this way, we are facing two different sets of demand dynamics. One is derived demand and other is direct demand. We believe that while serving the hospitality sector of UAE, we may not be in a strong bargaining position and may be charging prices which are marginally covering our costs whereas in open market for general public, since our product is based on the premise of health, we may be able to charge premium prices on our products in open market sell.

Based on these two different dynamics of demand, our pricing objectives will be different for both the segments of the market. While setting the prices for our products, we will be taking care of the following strategic objectives: (eyeswideopen.com, 2008) 1) Have a focus on the value delivered and its outcome. 2) Building competitive differentiation through price and quality 3) Executing our own business strategy So our key objectives for setting the pricing for our products will be to achieve above three broad strategic objectives specially our focus will be on building competitive differentiation through our pricing and quality.

However, on the more operational side, we will be focusing our pricing strategy to achieve healthy cash flows to achieve strong cash leverage so that our reliance on the external debt to execute our business is minimal. Based on that, we believe that there are different methods for setting up prices and each method has its own strong points and weaknesses and it’s more of a trial and error method before we can set up optimum prices to achieve our objectives. Based on our core strategy of value addition through healthy contents, we are planning to set our pricing strategy based on the value added based pricing strategy.

(eyeswideopen.com, 2008). However before setting up the strategy, we will be checking the price elasticity of our pricing method as in order to sustain our future strategic presence in the region and meet the contingencies. References eyeswideopen.com. (2008). Price Setting : How to Set your Prices Effectively. Retrieved March 1, 2008, from Eyeswideopen.com: http://www.eyeswideopen.com.au/articles/93/1/Price-Setting--How-to-Set-your-Prices-Effectively/Page1.html Oren, S. S. (1984). Comments on "Pricing Research in Marketing: The State of the Art.

The Journal of Business , 57 (1), S61-S64.