Answer to Question #248425 in Marketing for Pein

Question

Which pricing method (cost,demand,competition,profit-based) would you recommend for the following items to be sold in other countries?

Below are the following item to be sold in other countries. Briefly defend your reasoning.

* Tennis balls by a manufacturer in the Philippines.

* Mobile phones service in Chile

* Solar panels in Canada

Answer 1

Tennis balls by a manufacturer in the Philippines - In this situation, the company can follow the competition-based pricing in which the company has to focus on the price charged by the rival companies, and then the company can wither keep the price below them or above the price charged by the rival company. The price lower than the competitors will indicate better value for money to the customers while the price above the competitors will indicate better quality. We will use competition-based pricing as there will be other manufacturers of the tennis ball and if we do not match the price of our product with the price of the competitors, then we might lose the market.

Cell phone services in Chile - In this situation the most effective pricing strategy is cost-based pricing. This is due to the fact that the company would like to at least attain the break-even position and this can be done when it prices its services as per the cost-based pricing strategy. Cost-based pricing is important in the given situation as it will help the company to recover its costs. The customers may be quite price-sensitive and thus the focus will be to recover at least the expenses.

Solar panels in Canada - Here the company can go for profit-based pricing. This is due to the fact that selling solar panels will need a huge start-up cost and thus the company wants to recover its initial investment as soon as possible to be more profitable and for this, it can use profit-based pricing.