I can't believe the semester is almost over. I'm excited and sad. I've gotten used to my classes. This week we covered chapter 18, "Setting the Right Price." Price is the last of the four p's, Product, Price, Position, Promotion, that we will be covering. This is actually the last week of class. The final is on the 5th of May. I'm sorry I'm so late writing and posting this.
In class we reviewed or went over a few things for the final next week. I like this quote that I wrote down in class "best price usually falls between "expensive" and "prohibitively expensive." Our video discussion was on Acid-All and the case study was on Cable Television pricing. I'm not sure whether I like the idea of customizing what channels we pay for or not. There are positives and negatives to both sides of having customized plans/channels or not.
The process for setting a price is really more complex than I thought. There "is a four-step process: 1. Establish pricing goals. 2. Estimate demand, cost, and profits. 3. Choose a price strategy to help determine a base price. 4. Fine-tune the base price with pricing tactics." There are a lot of definitions in this chapter. One of which confused me. I learned this week that I need to be more flexible with my understanding of definitions. It's hard because sometimes things can seem so specific and other times they are not. I found the example of Chanel destroying their unsold merchandise inventory to be surprising. It seems to me to be such a waste, yet it fits their price strategy of price skimming. "Price Skimming a pricing policy whereby a firm charges a high introductory price, often coupled with heavy promotion." So they destroy the merchandise so they can keep prices high.
The chapter also discussed the legality and ethics of price strategy. It seems to me that some of these unfair trade practices are still being used even though they shouldn't, or at least I'm remembering seeing them or hearing of them before. The chapter also mentions "tactics for fine-tuning the base price." Base price is the definition I got confused on and I feel bad about it.... I think I've seen some good examples of price-bundling. "Price bundling [is] marketing two or more products in a single package for a special price." Microsoft recently did this in bundling it's Kinect for the Xbox with a couple of game codes. My Dad and I actually went to Walmart on Black Friday for the deal, it was a mad house and not worth it. I had called Walmart a few hours previously to find out how many they had and they wouldn't tell me. Even though when I got there they had only had like ten, all of which were sold out to people lining up before like nine o' clock. We ended up getting the same bundle deal online when we got home, it would have been cheaper to look online at Newegg in the first place. I think one of the keys to bundling is to look at the price of the individual parts of the bundle, that might help with knowing whether you are getting a good deal or not. But pricing is definitely trickier than I thought it was. Pricing can also change "during difficult economic times." I found the picture of a dollar bill covered with bandages to be funny.
Overall, I think this was a pretty good chapter and an interesting class. I learned a lot more than I thought I would. Having had this class I think I will look at advertising, marketing, prices, etc. more closely. If I ever do start my own business, I think I now have some basic knowledge that I could use to market my business. In the least I could probably marketing my self, through such tools as personal selling when looking for a job.
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