Organization of Ford Company - Essay Example

Cost-based pricing is a pricing form determined by the manufacturing and production cost of a commodity.  The form of pricing is advantageous since an organization is assured of not gaining a loss of its products. However, the strategy may prefer a high price than the preference of the customer (Nagle & Holden 35). In Ford Company, the cost-based form of pricing is preferred due to the diverse range of products it produces. The organization sets its minimum and maximum price range depending on the particulars of the product.

  The pricing strategy has ensured the organization records its required profits on products. In addition, in regards to the experience of the organization in the market, consumers feel comfortable with the prices set of the products (Nagle & Holden 56). At the start of the production in the organization, Ford used penetration pricing. Penetration is where an organization quotes relatively low prices. The prices are then raised when the organization gains market share.  The growth of the pricing range will be determined by factors influencing the market (Nagle & Holden 67)