Price

Price is the money charged for a product or service, the sum of the values that customers exchange
for the benefits of having or using the product or service. Every company uses some sort of pricing
strategies to set a particular price of the product. There are three main types of pricing strategy:

 Customer value- based pricing

 Cost-based pricing
 Competition-based pricing
Customer Value-Based Pricing:

Selling price based on buyer’s perception of value rather than on seller’s cost. It has further two
categories:

1. Good-Value Pricing
2. Value-Added Pricing

Cost-based Pricing Strategy:

It involves setting prices based on the costs for producing, distributing, and selling the product
plus a fair rate of return for its efforts and risks. It further has three more times:

1. Fixed Costs
2. Variable Costs
3. Total Costs
Competition-based Pricing Strategy:
Selling prices is based on competitor price, strategies, costs and market offerings.

K&N’s:
The pricing strategy used by K&N’s is cost-based pricing strategy as K&N’s follows the steps of
cost-based pricing strategy, it designs a product, determines the cost of the product, set the price
of the product and then convince the buyers of the product’s value. The pricing strategy of K&N’s
is such that it uses the Fixed costs strategy as it has the fixed costs for its product, the cost does
not vary with the production or the sales, hence, K&N’s uses the cost-based strategy, it
encompasses the total cost of its production and efforts including costs and maintains the fixed
cost of its products.

K&N’s maintains the same cost of the product irrespective of the changes in costs as the prices of
chicken and production changes very frequently in Pakistan as the Economy changes I seconds
due to which the prices of everything including chicken, feed, labor, rent etcetera everything
changes but the K&N’s keep the fixed price of the products in Pakistan.
Menu Foods:

Menu Foods came in the industry of the frozen and ready to cook food after K&N’s, K&N’s is the
most popular and bestselling brand in the industry of frozen foods and ready to cook food, making
K&N’s a tough competitor of Menu Food. Menu Foods hence follows the Competition-based
pricing strategy. According to the competition-based pricing strategy Menu Foods follows the
costs, prices, strategies, market offerings and target audience of the K&N’s. Hence, the pricing
strategy of Menu Foods is Competition-based pricing strategy. Following the K&N’s Menu Foods
follow the Cost-based pricing strategy keeping the Fixed costs strategy in perspective, Menu Foods
keep the fixed costs of the products no matter how much the costs of production and sales changes
the prices remain same. Moreover, the market offerings of Menu Foods are similar to the K7N’s
along with the target market of Menu Foods.

K&N’s follows the Cost-based pricing strategy and Menu Foods follow the Competition-based
pricing strategy.