mkt402 week 6 discussion 1 and responses
Week 6 Discussion 1
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- ” Implementing Pricing Strategy” Please respond to the following:
- Determine which area you believe provides the greatest challenge for organizations implementing new pricing strategies. Support your argument with specific examples.
RESPOND TO THESE POSTS:
Miller
RE: Week 6 Discussion 1
The greatest challenge for organizations implementing a new pricing strategy is the input and coordination required across so many different functional areas such as: marketing, sales, capacity management, and finance. Implementing a successful pricing strategy is built on three pillars, an effective organization, timely and accurate information, and appropriately motivated management. To ensure that these three pillars are present it is important that everyone involved in pricing decisions understand what his role in the price-setting process is and what rights he has to participate. For example, the pricing manager might have the right to set the price, sales management might have the right to consult on the pricing decision while senior management might have the right to veto the decision. In most cases, these decision rights are not clearly specified, changing the pricing decision from a well-defined business process to an exercise in political power as various functional areas attempt to influence the offered price.
AND THIS POST:
Jackson
RE: Week 6 Discussion 1
I see it all the time in the car business. Pricing represents a strategy to increase sales volume at a profit while incorporating and communicating critical messages about the value that the offering delivers to the customer. This involves much more than setting prices. Even organizations that invest considerable effort in establishing prices frequently leave money on the table. Pricing to close a deal is what business and pricing should be all about. After all, if we can’t price to close a deal, what good is pricing? The process should work to provide us with a profit, right? Well, not really. When you price to close a deal, it provides every customer every incentive to negotiate for lower prices. These customers put salespeople through a meat grinder of price negotiations. The process, in turn, gives salespeople every incentive to respond with lower prices. It undermines confidence in prices and leaves money on the table.
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