Business Studies
Reply must be a paragraph long of at least 275 words or more not including references which should supported by citing at least 2 peer-reviewed journal articles between 2017-2021 for each reply and a biblical reference. Your reply must be in current APA format and must include a reference list. Make sure that you are adding new and relevant information with each reply. Reference sample make sure to include DOI-Drollinger, T., Comer, L. B., & Warrington, P. T. (2006). *MUST HAVE BIBILICAL Reference
Discussion to reply to:
Discussion Thread: Price
Introduction: Synopsis of main points on the fourth P- Pricing
In this research paper, the importance of pricing within any given organization will be explored through the theoretical roots and highlighting the price impacts on optimizing the profits. For any business success to be achieved, the 4Ps elements of marketing must be considered. The Marketing Mix Pricing is crucial in achieving the organizational objectives. Since the market is unpredictable and economic fluctuation affects the business, causing dynamics in the pricing environment, Liozu & Hinterhuber (2012). In most current situations, businesses cannot determine the prices of the products. For the business to remain competitive in the market, it has lower its prices. According to Farm (2017), the prices are determined by various factors such as the purchasing cost of raw materials, production costs, distribution costs, and transportation costs.
Farm, A. (2017). “Pricing and Price Competition in Consumer Markets.” Journal of Economics, 120(2), 119-133. https://doi.org/10.1007/s00712-016-0503-7
The owners of the businesses should consider several factors during specific product pricing. Payne & Frow (2014) states that the variant of the price is flexible; changes can frequently happen at any time determined by the direction of demand metrics. This research paper discusses a plain model of the pricing mechanism accepted by the buyers as stated and pricing as determined by the sellers in the consumer markets. It elaborates on the competitive nature of the pricing in the market, and the way business is forced to lower prices for it to remain profitable. It also states how the nature of market sales can restrict the production and not the business’s ability to control the prices. If the product’s pricing is higher than the current prices in the market, this can negatively affect sales growth. The high pricing of the products can be a turn-off to most customers, but to others, it can be a perception of a value-creating marketing mix. For instance, Customer considers the products and services with low pricing as an indication that the business is low-cost and effective in the process of production. Also, customers assume products with high-price mean the quality of products and services is high.
Ante, F. (2020). Pricing in practice in consumer markets. Journal of Post Keynesian Economics, 43(1), 61-75. https://doi.org/10.1080/01603477.2019.1616562 Factors
Factors Affecting the Price
Farm (2017) emphasizes that the business leaders determine the product’s pricing after considering sales growth, profit maximization, market share, and future survival. Furthermore, the market has limitations that affect the maximization of profits by nature—for example, determining the exact marginal cost and marginal revenue of previously sold goods. Payne & Frow (2014) that business performance is affected by internal and external factors, and it is fundamental to check out those factors. The internal factor that affects the organization’s performance is the willpower to control the pricing of the products. The pricing decision should include the fixed and variable costs of the company.
Zeithaml (1988) states that the life cycle of the product pricing decision is affected at different stages and levels. Market competition is a significant factor that affects the process of deciding the pricing of the products and services, Zeithaml (1988). The business must analyze the market’s competitive nature at different levels before setting the prices of its products. The influx of similar products in the market creates a big challenge for the business to penetrate the market without facing hardships. Liozu & Hinterhuber (2012) state that the organization’s sustainability can be altered by factors such as economic boom, interest rates, recession, and inflation. The price sensitivity and customer purchasing power should be considered during the price-fixing.
Sven, F., Monika, C. S., & Sabine, K. (2018). How Pricing Teams Develop Effective Pricing Strategies for New Products. Journal of Product Innovation Management, 36(1), 66-86. https://doi.org/10.1111/jpim.12444
Particular customers can be targeted by the pricing of some products done by the business. Kmart Australia retail stores offer a wide range of consumer goods such as toys, homes, offices, gaming, electronic, and entertainment products Kmart (2020). In 2020, the coronavirus pandemic, Particular customers can be targeted by pricing some products done by the business. Kmart Australia retail stores offer a wide range of consumer goods such as a toy, homes, offices, gaming, electronics, and entertainment products Kmart (2020). In 2020, the coronavirus pandemic affected the pattern demands of consumer behavior, products, and retail stores. Baker et al. (2020) state that fashion, furniture, and electronics have significantly affected the discretionary purchase power of the customers. Many customers could only be able to purchase food items and household supplies. Mollenkopf et al. (2020) state that the pandemic negatively impacted the retail sector. Many retailers experienced disruptions in merchandising, supply chain, and inventory. They have affected the pattern demands of consumer behavior, products, and retail stores. Baker et al. (2020) state that fashion, furniture, and electronics have significantly affected the discretionary purchase power of the customers. Many customers could only be able to purchase food items and household supplies. Mollenkopf et al. (2020) state that the pandemic negatively impacted the retail sector. Many retailers experienced disruptions in merchandising, supply chain, and inventory. During this pandemic season, the purchasing power of individuals reduced, and the retail stores’ sales reduced significantly.
Baker, S. R., Farrokhnia, R. A., Meyer, S., Pagel, M., & Yannelis, C. (2020). How does household spending respond to an epidemic? consumption during the 2020 covid-19 pandemic (No. w26949). National Bureau of Economic Research.
Price Optimization
The pricing defines the worth and value of a product that influences the consumer’s purchase will choices. Farm (2017) states that the wrong product pricing can lead to the organization’s downfall. Thereof, the business should put the right price on its products despite all the factors affecting them. King James Version (Proverbs 11:1) states that a false balance is an abomination to the Lord: but a just weight is his delight. According to this scripture, business people should make fair decisions on the pricing of the products using the correct scales. The volume of the products should be fair with its pricing. Payne & Frow (2014) states that many business practice price fluctuations to boost sales growth.
Conclusion
Farm (2017) states that the pricing strategy creates a picture of an internal capacity and organizational strength compared to their market rivals, considering the purchase will of the consumers. The pricing strategy influences the cost-effectiveness and profitability of organizations. The pricing of the products also is a crucial determinant of sustainability and the future survival of the business.
References
Ante, F. (2020). Pricing in practice in consumer markets. Journal of Post Keynesian Economics, 43(1), 61-75. https://doi.org/10.1080/01603477.2019.1616562 Factors
Baker, S. R., Farrokhnia, R. A., Meyer, S., Pagel, M., & Yannelis, C. (2020). How does household spending respond to an epidemic? consumption during the 2020 covid-19 pandemic (No. w26949). National Bureau of Economic Research.
Farm, A. (2017). “Pricing and Price Competition in Consumer Markets.” Journal of Economics, 120(2), 119-133. https://doi.org/10.1007/s00712-016-0503-7
Gittelsohn, J., Trude, A., & Kim, H. (2017). Pricing Strategies to Encourage Availability, Purchase, and Consumption of Healthy Foods and Beverages: A Systematic Review. Preventing chronic disease, 14, E107. https://doi.org/10.5888/pcd14.170213
Hall, M. C., Prayag, G., Fieger, P., & Dyason, D. (2020). Beyond panic buying: consumption displacement and COVID-19. Journal of Service Management. https://www.kmart.com.au/about-kmart
King James Bible (2017), King James Bible online: https://www.biblegateway.com/passage/?search=Proverbs%2011&version=KJV
Sven, F., Monika, C. S., & Sabine, K. (2018). How Pricing Teams Develop Effective Pricing Strategies for New Products. Journal of Product Innovation Management, 36(1), 66-86. https://doi.org/10.1111/jpim.12444
ANSWER
Price Reply 1
Price entails the cost consumers pay for a product. Companies have to focus on strategic choices when pricing products. I agree with the post that marketing mix pricing is vital in achieving organizational objectives. Prices are determined by varying factors such as production costs, purchasing cost of raw materials, transportation costs and distribution costs. Farm (2017) provides an ideal price mechanism in market where buyers accept prices as given and prices are structured by sellers in many markets. Farm (2017) also clarifies price competition through proposing that a market rate goes down when a rate cut is cost-effective to a business even after the competitors take follow a similar approach. This shows the competitive nature of pricing. For instance, when the price of a product is higher than the current prices, this negatively impacts sales growth. I concur with the post that business owners should consider various factors when pricing since customers consider products with low pricing and take it as an indication that the business is effective and low cost in their production process.
Ante (2020) focuses on pricing theory in consumer markets that links to value-based pricing and cost plus pricing to price leadership and competition. It’s an empirical fact that the cost plus pricing and the valued based pricing are common pricing procedures in the marketing economy. When determining the price of a product, the price leader is the leading firm in the industry or the utmost innovative. Ante (2020) states that in a market where all firm have similar value based or cost plus prices, the individual prices and the market prices will depend on similar factors.
Sven, Monika and Sabine (2018) state that companies are increasingly relying on pricing teams to handle the challenges and complexity of determining the price of a new product. The pricing teams consist of two or more professionals within the company that have been engaged in the decision making process regarding pricing strategy of new products. Sven, Monika and Sabine (2018) have presented the framework through which the pricing teams develop effective pricing and pricing team characteristics such as autonomy, experience, functional diversity and stability. Choosing a suitable pricing team can enable effective utilization of intuition and rationality.
Price optimization also affects the pricing of product. Price optimization entails analyzing the market and consumer data to find the most optimal price for a service or product. During the pandemic, the household consumption responded to the crisis which led to many households reducing their spending across major items (Baker et al., 2020). This reduced the demand for products which led to many business focusing on optimal price to sell their products. Proverbs 11:1 links to pricing decisions since it states that false balance is an abomination. Therefore, businesses should focus on fair decisions on pricing their products.
References
Ante, F. (2020). Pricing in practice in consumer markets. Journal of Post Keynesian Economics, 43(1), 61-75. https://doi.org/10.1080/01603477.2019.1616562
Baker, S. R., Farrokhnia, R. A., Meyer, S., Pagel, M., & Yannelis, C. (2020). How does household spending respond to an epidemic? consumption during the 2020 covid-19 pandemic (No. w26949). National Bureau of Economic Research.
Farm, A. (2017). “Pricing and Price Competition in Consumer Markets.” Journal of Economics, 120(2), 119-133. https://doi.org/10.1007/s00712-016-0503-7
King James Bible (2017), King James Bible online: https://www.biblegateway.com/passage/?search=Proverbs%2011&version=KJV
Sven, F., Monika, C. S., & Sabine, K. (2018). How Pricing Teams Develop Effective Pricing Strategies for New Products. Journal of Product Innovation Management, 36(1), 66-86. https://doi.org/10.1111/jpim.12444
