Value-based pricing and Competition-based pricing
Order ID 53563633773 Type Essay Writer Level Masters Style APA Sources/References 4 Perfect Number of Pages to Order 5-10 Pages
Value-based pricing and Competition-based pricing
In contemporary marketing, timeliness is critical, given the intense competition in most markets. Many successful companies have moved to a direct sales model in order to maintain greater control and better profit margins. Selection of non-direct distribution outlets carries the sales responsibility to the retail level, as outlets provide the primary interface with each customer. For some products, distribution is now friction free(friction being the lag between demand and supply). For certain kinds of software and other digital modalities (including music), delivery can be as simple as a download to your PC: no shortage of supply and no waiting.
Often, superior marketing efforts are the sole support for a higher price. The key rule in pricing is to set a price point at which your target customers will buy. If you cannot make a profit at that point, then perhaps you do not need to be in that business.
As complex as pricing decisions can be, many organizations rely on three basic methodologies:
- Cost-based pricing, which takes the basic costs of the product or service and adds an acceptable profit margin.
- Value-based pricing, which attempts to set a price or value for the product to either solve a problem or save time and money.
- Competition-based pricing, which simply follows along with what the market price is on similar products.
Questions to consider
To deepen your understanding, you are encouraged to consider the questions below and discuss them with a fellow learner, a work associate, an interested friend, or a member of the business community.
- Supply chain management is an important part of a company’s distribution strategy. After reading the suggested articles in the Resources regarding REI, consider REI’s current channel and methods of distribution. How does REI use supply chain management? Does this method work well? How might it be improved?
The following optional resources are provided to support you in completing the assessment or to provide a helpful context. For additional resources, refer to the Research Resources and Supplemental Resources in the left navigation menu of your courseroom.
The following e-books or articles from the Capella University Library are linked directly in this course.
- Ruskin-Brown, I. (2006). Mastering marketing (2nd ed.). London, GBR: Thorogood Publishing.
- McDonald, M., & Wilson, H. (2011). Marketing plans: How to prepare them, how to use them (7th ed.). Hoboken, NJ: Wiley.
- Kermally, S. (2004). Gurus on marketing . London, GBR: Thorogood Publishing.
Course Library Guide
A Capella University library guide has been created specifically for your use in this course. You are encouraged to refer to the resources in the BUS-FP3030 – Fundamentals of Marketing and Sales Library Guide to help direct your research.
Access the following resources by clicking the links provided. Please note that URLs change frequently. Permissions for the following links have been either granted or deemed appropriate for educational use at the time of course publication.
- Business Wire, Inc. (2001, June 19). REI announces strategic business changes[Press release]. Retrieved from https://advance-lexis-com.library.capella.edu/api/permalink/b262374e-0be2-4d25-8176-6ab177c49e52/?context=1516831
- Business Wire, Inc. (2001, March 27). REI commits to youth with $100,000 award[Press release]. Retrieved from http://library.capella.edu/login?qurl=https%3A%2F%2Fsearch.proquest.com%2Fdocview%2F445848388%3Faccountid%3D27965
- Marketing Power, Inc. (2013). American Marketing Association . Retrieved from http://www.marketingpower.com/Pages/default.aspx
- Hoover’s, Inc. (2013). Hoovers . Retrieved from http://www.hoovers.com
- The Ad Age Group. (2014). AdvertisingAge . Retrieved from http://adage.com
- Direct Marketing Association. (2013). DMA: Advancing and protecting responsible data-driven marketing . Retrieved from http://thedma.org
- Concept Marketing Group Inc. (2013). Concept Marketing Group . Retrieved from http://www.marketingsource.com
- Lamb, C. W., Hair, J. F., & McDaniel, C. (2019). MKTG 12 (12th ed.). Boston, MA: Cengage Learning. Available in the courseroom via the VitalSource Bookshelf link.
- Ries, A., & Trout, J. (1994). The 22 immutable laws of marketing. New York, NY: Harper Business. Available in the courseroom via the VitalSource Bookshelf link.
For this assessment, consider that you work as a marketing analyst for a consulting firm. You were previously asked to develop an analysis white paper to be used for marketing purposes to showcase the firm’s consulting capabilities, and your manager and the firm’s marketing team was impressed with your work. As a result, your manager asked you to create another analysis white paper to also be used for marketing purposes, with a goal of highlighting the firm’s consulting capabilities for each of the “four Ps” of product, place, price, and promotion.
Analyze the place and price for a product. You can use the same product you used for the previous assessment, or you can choose another organization or product.
- Anï»¿alyze distribution channels (how does the organization get the product to market), and assess strengths and potential weaknesses.
- Analyze where the product is being sold and the approach to inventory, and assess strengths and potential weaknesses of the place of sale.
- Analyze the relationship between the company’s place strategies for the product and the company’s economic success and propose potential changes in the place strategies that could improve the company’s economic success.
- Describe potential management challenges related to recommended changes to the company’s place strategies, and assess how those challenges might be addressed.
- Analyze the characteristics of a product’s pricing system, including if it is cost-based, value-based, or competition-based. How did you come to your determination? Assess strengths and weaknesses of the pricing system.
- Analyze the relationship between the company’s price strategies for the product and the company’s economic success. Propose potential changes in the price strategies that could improve the company’s economic success.
- Describe potential management challenges related to recommended changes to the company’s price strategies, and assess how those challenges might be addressed.
Based on your executive audience, your case study should be well organized and written in clear, succinct language. Follow APA rules for attributing sources that support your analysis and conclusions.
Academic Integrity and APA Formatting
As a reminder related to using APA rules to ensure academic honesty:
- When using a direct quote (using exact or nearly exact wording), you must enclose the quoted wording in quotation marks, immediately followed by an in-text citation. The source must then be listed in your references page.
- When paraphrasing (using your own words to describe a non-original idea), the paraphrased idea must be immediately followed by an in-text citation and the source must be listed in your references page.
Value-based pricing and Competition-based pricing
QUALITY OF RESPONSE NO RESPONSE POOR / UNSATISFACTORY SATISFACTORY GOOD EXCELLENT Content (worth a maximum of 50% of the total points) Zero points: Student failed to submit the final paper. 20 points out of 50: The essay illustrates poor understanding of the relevant material by failing to address or incorrectly addressing the relevant content; failing to identify or inaccurately explaining/defining key concepts/ideas; ignoring or incorrectly explaining key points/claims and the reasoning behind them; and/or incorrectly or inappropriately using terminology; and elements of the response are lacking. 30 points out of 50: The essay illustrates a rudimentary understanding of the relevant material by mentioning but not full explaining the relevant content; identifying some of the key concepts/ideas though failing to fully or accurately explain many of them; using terminology, though sometimes inaccurately or inappropriately; and/or incorporating some key claims/points but failing to explain the reasoning behind them or doing so inaccurately. Elements of the required response may also be lacking. 40 points out of 50: The essay illustrates solid understanding of the relevant material by correctly addressing most of the relevant content; identifying and explaining most of the key concepts/ideas; using correct terminology; explaining the reasoning behind most of the key points/claims; and/or where necessary or useful, substantiating some points with accurate examples. The answer is complete. 50 points: The essay illustrates exemplary understanding of the relevant material by thoroughly and correctly addressing the relevant content; identifying and explaining all of the key concepts/ideas; using correct terminology explaining the reasoning behind key points/claims and substantiating, as necessary/useful, points with several accurate and illuminating examples. No aspects of the required answer are missing. Use of Sources (worth a maximum of 20% of the total points). Zero points: Student failed to include citations and/or references. Or the student failed to submit a final paper. 5 out 20 points: Sources are seldom cited to support statements and/or format of citations are not recognizable as APA 6th Edition format. There are major errors in the formation of the references and citations. And/or there is a major reliance on highly questionable. The Student fails to provide an adequate synthesis of research collected for the paper. 10 out 20 points: References to scholarly sources are occasionally given; many statements seem unsubstantiated. Frequent errors in APA 6th Edition format, leaving the reader confused about the source of the information. There are significant errors of the formation in the references and citations. And/or there is a significant use of highly questionable sources. 15 out 20 points: Credible Scholarly sources are used effectively support claims and are, for the most part, clear and fairly represented. APA 6th Edition is used with only a few minor errors. There are minor errors in reference and/or citations. And/or there is some use of questionable sources. 20 points: Credible scholarly sources are used to give compelling evidence to support claims and are clearly and fairly represented. APA 6th Edition format is used accurately and consistently. The student uses above the maximum required references in the development of the assignment. Grammar (worth maximum of 20% of total points) Zero points: Student failed to submit the final paper. 5 points out of 20: The paper does not communicate ideas/points clearly due to inappropriate use of terminology and vague language; thoughts and sentences are disjointed or incomprehensible; organization lacking; and/or numerous grammatical, spelling/punctuation errors 10 points out 20: The paper is often unclear and difficult to follow due to some inappropriate terminology and/or vague language; ideas may be fragmented, wandering and/or repetitive; poor organization; and/or some grammatical, spelling, punctuation errors 15 points out of 20: The paper is mostly clear as a result of appropriate use of terminology and minimal vagueness; no tangents and no repetition; fairly good organization; almost perfect grammar, spelling, punctuation, and word usage. 20 points: The paper is clear, concise, and a pleasure to read as a result of appropriate and precise use of terminology; total coherence of thoughts and presentation and logical organization; and the essay is error free. Structure of the Paper (worth 10% of total points) Zero points: Student failed to submit the final paper. 3 points out of 10: Student needs to develop better formatting skills. The paper omits significant structural elements required for and APA 6th edition paper. Formatting of the paper has major flaws. The paper does not conform to APA 6th edition requirements whatsoever. 5 points out of 10: Appearance of final paper demonstrates the student’s limited ability to format the paper. There are significant errors in formatting and/or the total omission of major components of an APA 6th edition paper. They can include the omission of the cover page, abstract, and page numbers. Additionally the page has major formatting issues with spacing or paragraph formation. Font size might not conform to size requirements. The student also significantly writes too large or too short of and paper 7 points out of 10: Research paper presents an above-average use of formatting skills. The paper has slight errors within the paper. This can include small errors or omissions with the cover page, abstract, page number, and headers. There could be also slight formatting issues with the document spacing or the font Additionally the paper might slightly exceed or undershoot the specific number of required written pages for the assignment. 10 points: Student provides a high-caliber, formatted paper. This includes an APA 6th edition cover page, abstract, page number, headers and is double spaced in 12’ Times Roman Font. Additionally, the paper conforms to the specific number of required written pages and neither goes over or under the specified length of the paper.
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