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Assignment on Managerial Economics

Assignment on Managerial Economics

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Published by: diplococcous on Nov 20, 2009
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ASSIGNMENT ON MANAGERIAL ECONOMICS
ASSIGNMENT ONMANAGERIALECONOMICSBY RAHULGUPTA
Question 1: What is pricing policy? What arethe internal and external factors of thepolicy
?
Introduction:
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ASSIGNMENT ON MANAGERIAL ECONOMICS
 
Pricing Factors toConsider:
Determine primary and secondary marketsegments.
This helps you better understand theoffering's value to consumers. Segments areimportant for positioning and merchandising theoffering to ensure maximized sales at theestablished price point.
Assess the product's availability and nearsubstitutes.
Under pricing hurts your product asmuch as overpricing does. If the price is too low, potential customers will think it can't be thatgood. This is particularly true for high-end, prestige brands. One client underpriced itssubscription product, yielding depressedresponse and lower sales. The firmunderestimated the uniqueness of its offering,the number of close substitutes, and the strengthof the consumer's bond with the product. As aresult, the client could increase the price withonly limited risk to its customer base. In fact, theinitial increase resulted in more subscribers asthe new price was more in line with itsconsumer-perceived value.
Survey the market for competitive andsimilar products.
Consider whether new products, new uses for existing products or newtechnologies can compete with or, worse,leapfrog your offering. Examine all possibleways consumers can acquire your product. I'veworked with companies that only take intoaccountdirect competitorsselling throughidentical channels. Don't limit your analysis to
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ASSIGNMENT ON MANAGERIAL ECONOMICS
online distribution channels.Competitors may define your price range. In thiscase, you can price higher if consumers perceiveyour product and/or brand is significantly better; price on parity if your product has better features; or price lower if your product hasrelatively similar features to existing products.An information client faced this situation with a premium product. Its direct competitorsestablished the price for a similar offering. Asthe third player in this segment, its choices were price parity with an enhanced offering or a lower  price with similar features.
Examine market pricing and economics.
A paid, ad-free site should generate more revenuethan a free ad-supported one, for example. Inconsidering this option, remember to incorporatethe cost of forgone revenue, especially asadvertisers find paying customers moreattractive.
Calculate the internal cost structure andunderstand how pricing interacts with theoffering.
I recommended a content client promote its advertising-supported free e-zines toincent readers to register. The client believed thee-zines had no value as the content wasrepurposed from another product, so it didn'tadvertise them. Yet the repurposed content wasexactly what readers viewed as a benefit. Byundervaluing its offering, the client missed anopportunity to increase registrations and, hence,advertising revenues with a product thateffectively had no development costs.
Test different price points if possible.
This isimportant if you enter a new or untappedmarket, or enhance an offering with consumer-oriented benefits. To determine price,MarketingExperiments.comtested three 
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great help.......thanks
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Undoubtedly this assignment will be help 4 me to submit a exclusive assignment..
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