Pay What You Want is one of the participative pricing policies that gives consumers fully control over the price of a product or service. The buyer has the option to choose the price of the product or service, which can be zero amounts. Nowadays this pricing strategy has been started to practice by companies to bring a new aspect for their product offerings and more researches have been done to explore more about this mechanism. This master thesis study aimed to explore the impact of beneficiary involvement as a receiver of the payment under Pay What You Want pricing mechanism. Such beneficiaries are parties who take a role during creation or distribution processes of a product or service. 96 respondents have participated an experiment where …show more content…
Participative pricing mechanisms, depending on its innovativeness, can be an advantageous promotion tool to catch potential customers? attention. Moreover, it gives seller a unique data regarding consumers? willingness to pay for a specific product or a service (Kim, Natter & Spann, 2009; Spann, Skiera & Schaefers, 2004). These data can be used as a forecast when predicting future sales of a product or a service (Kim, Natter & Spann, 2009).
The most well known forms of participative price mechanisms can be listed as classic auctions, price negotiations and name your own price. Kim, Natter and Spann (2009) distinguished these participative pricing mechanisms due to the way of interaction between buyer and seller. For instance, authors called ?horizontal interaction? a situation in which there are many buyers and sellers involved in sales process. ?Auctions? can be given as an example where the buyer?s aim is to offer the highest price and get the product from the seller by beating the other buyer?s offer (Kim, Natter & Spann,
As we learned from Chapter 12, price must be carefully determined and match with firm’s product, distribution, and communication strategies. (Hutt & Speh, 2012, p. 300) Therefore, there should be a strong market perspective in pricing. In order to build an effective pricing policy, marketers should focus on the value a customer places on a product or service. One of the most effective ways to do so is differentiating through value creation.
Three cheers for teaching distributed bargaining. Negotiation Journal, 73-78. William Goetzmann, A. L. (2006). Estimating House Price Indexes in the Presence of Seller Reservation Prices. Review of Economics and Statistics.
The pricing strategy will start out rather high for this product upon its release in order to draw a more selective crowd such as the upper class members of the urban society. Once the product has succeeded within this market there will be a development of additional variations of the product which will allow for certain models, with less features, to be sold at a lower price point in order to attract the members of society who are less willing to pay the high asking price for the top of the line version of the
price as the major decision-making tool for customers (“Global Consumer Electronics”, 2013). This lack of
“The buying behavior of final consumers, individuals and households who buy goods and services for personal”. Groupon consumers mainly respond to: “The consumer’s buying behavior”. Brand selection: the advertisements, messages and discounts offered to consumers to try something new with lower price for a variety of products, restaurant menu, branded handbag and so on. Product service: Groupon offers special deals and the consumer can select the convenient time for salon appointment or dining appointment. Furthermore, the company policy “The Groupon Promise” encourages consumers to buy as no question will be asked to return purchased Groupon, this towards the customer satisfaction guarantee.
2. Kotler and Keller define six product-mix pricing methods: product-line pricing, optional-feature pricing, captive-product pricing, two-part pricing, by-product pricing, and product-bundling pricing (Kotler & Keller, 2012). An optional-pricing method implies offering optional features, products and services in addition to the main product, with some attributes included in the standard price and others being charged separately. Toyota can implement this type of pricing to its manufacturing process. For instance, the firm could put a standard price for its “mono-spec” Scion and offer a multiple of customization elements at dealerships for a separate price. Toyota can also use product-line pricing method, which suggests asking different prices for different...
NetMBA. (2011). Pricing Strategy. In NetMBA Business Knowledge Center. Retrieved February 27, 2011, from http://www.netmba.com/marketing/pricing/
Consumer offerings are essential products that are available in the consumers’ market. However, not all these offerings are part of the consumers’ need at a particular time. In this brief piece of writing, readers will understand the consumer offerings that relate to their needs and when. Similarly, readers will learn the difference in these offerings and probably the products the author has patronized with a vivid example. At the end of the paper, readers should feel free to consult the references that aided the writing.
Consumers are motivated to spend more when there are incentives present in the form of discounts and special promotions. Their satisfaction in spending less to buy a desired item indicates how incentives work by influencing an individual’s decision making ability. The fact that the item was on a discount enabled the individual to buy it as the reduction in the price of the item was a strong economic incentive. The concept of incentive is present in an everyday life situation as it basically impacts the actions of every individual. Incentives are efficient tools used to manipulate the human behaviour in order to achieve desired outcomes. However, it is deniable that incentives deliver the expected results all the time. Incentives do not always achieve its’ goals. This essay argues about the flaws in incentives due to the nature of incentives itself, discusses the effect of incentives that encourage cheating and the result of an ineffective incentive given the circumstances. Before scrutinizing the effectiveness of an incentive, it is fundamental to understand the nature of incentives itself. According to the Freakonomics, incentives are essentially divided into three aspects; social, moral and economic. Social incentives tend to determine how individuals respond to societal pressure. It is the needs of an individual to obtain acceptance among peers, gain reputation or conform by norms of the society that causes the individual to react in a particular manner. Meanwhile, moral incentives are much more subjective and individualized. Moral incentives use the rational and emotional sides of individuals to encourage or discourage them from making certain choices. It reflects the principles of being humane. It appeals to the conscience of...
Job costing involves usage of situations where every job is done cost differently, consumers specifications play a bigger picture in this case. Direct and indirect costs are encountered. It is believed that job costing has lots of costs accrued from the production to the consumers (REEVE, J. M., WARREN, C. S., & DUCHAC, J. E. 2012). This involves labor, running of machines, and all the individuals who are involved in the production of a product from raw to the final product, indirect costs are applied in this order. Job costing order is best showcased in a manufacturing company, let’s take coca cola company, company specialized in beverages manufacturing and distribution, usually customers have no say in the final products of this company, but as the trends for consumption of a certain flavor, according to their statistics they will conform with the demands. The special requirements, like name branding on the bottles of the beverages, customization of the containers have had a significant impact in the consumption of coca cola products (Weygandt, J. J., Kieso, D. E., & Kimmel, P. D. 2010).
As with all markets and their respective economies, having equilibrium is one of the key factors of a successful system. Although most markets do not reach equilibrium, they attempt at getting close. There are numerous methods devised to reach equilibrium, whether they involve human intervention directly or a cumulative decision by all factors involved. These factors may be a seller's willingness to lower overall revenue, or a buyer's willingness to withhold some demand for a certain product. Of course, the basics of supply and demand retrospectively control the equilibrium in the market.
Value is an integral part of marketing (Newman, 2015). If consumers are provided with goods and ideas of greater value by a business compared to its competitors, that have shown the businesses in depth market research taken in order to fulfill its consumer’s particular needs then it can create longer affiliations with the consumers due to the level of satisfaction and quality provided. Based on the concept of “Demand Chain Management” (Madhani, 2015).
Collusion in auctions is a non-competitive agreement between bidders to collaborate and maximise their total profit by reducing or eliminating competition. It is a primary concern for auctioneers as people who form cartels can significantly harm the seller’s revenue. The aim of the paper “Fighting collusion in auctions: An experimental investigation” is to compare collusive properties of three types of auctions and how effective they are in deterring collusion which are:
Relative value of distributive agreement is determined based on the competitiveness of the market which negotiation is conducted about. For instance, in a market under perfect competition, where there are many buyers and sellers, prices mainly reflect supply and demand, and the parties are simply price takers, the value of distributive approach to negotiation will be trivial since any potential agreement will be at a pre-determined “market price”. Slight variance to that value will trigger failure in the negotiation. On the other hand, under conditions of monopolistic competition where number of producers or provides is very limited and uniqueness of the product or service is extremely high,
Pick n Pay regard people as one of the most important parts of the successful running of the business and it is vital to keep the customers happy about the business. That is why people fall as one of the four legs of Pick n Pay and it is proof seeing as Pick n Pay has won awards for best customer service and best customer loyalty programme in 2013.