Pricing strategy varies significantly across different market
structures. The pricing guidelines in a monopoly market are relatively
straightforward. Since the company is the only producer offering the
product, it can mark-up the price as far as the customer can bear. The
pricing strategies for a producer operating in a perfect competition
structure are also fairly intuitive. They are price takers, and hence
price is set at the marginal cost of the product. This is due to the
fact that there are many firms offering nearly identical products.
However, there is optimal pricing for the market structures offering
differentiated products with many competitors (oligopoly) or a few
producers (monopolistic competition). These are much more complex and
involved. It has been stated that differentiation in products that
creates differences in customer valuation is the most prevalent type of
competition. In such markets pricing strategies may include the three
C’s of cost, competition, and customer.
Develop
a paper detailing an analysis of market structures and relating pricing
strategies that are suitable for each of these structures.
Furthermore, include a real world example of pricing strategy for a
specific company by identifying its market structure.
Your paper should be between 1750 and 2500 words, in APA Format
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