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Essay / Research Paper Abstract
This 5 page paper considers how pricing strategy should be formulated for a new hand held computer. The paper starts with considering different potential pricing strategies, then looks at the elasticity of the product and how the initial pricing may fit in with the overall pricing strategy as well as the rest of the company's marketing mix. The bibliography cites 2 sources.
Page Count:
5 pages (~225 words per page)
File: TS14_TEsonicpr.rtf
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Unformatted sample text from the term paper:
such as introduction pricing, the way this will impact on other sales of the companies sown products, and what adaptations may need to be made. With a knowledge of a
product we can then develop a pricing strategy. Here we have a handheld computer Sonic unit, aimed at the business market. 2. Aims of the Pricing Strategy The initial aim
of he price will be to get the product into the market to develop a reputation and increase demand, The pricing strategy will not be one of a loss leader,
this will aim to have a price that will be above the unit cost for each unit sold. It may be tempting to use proactive tactics such as aggressive pricing
strategies which include penetration pricing and predatory pricing. Penetration pricing is where a product is prices at a very low rate on a temporary basis to help establish itself in
the market (Kotler, 2003). Alternatively, predatory pricing, where pricing is set below cost in order to gain the purchases from the competitions former customers, with the aim of keeping them
when prices are increased. These are tactics that will get the units into the market very quickly, but unlike repeat purchase items, where process such as this are often seen.
There may be same difficulties in using this type of pricing (Kotler, 2003). Penetration pricing may be attractive, there is not a loss made on the sale of the
units, but as they are priced at a low level they are easy to move. The difficult here is in the level of contribution they may make towards the initial
research and development that created the product. This will created a longer pay back period and decrease the level of profit. The used of predatory pricing may also be
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