4 ?? PRICING STRATEGIES select any four (4) of the five sets of questions. 1. Companies do not usually set a single price, but rather

4 â?? PRICING STRATEGIES
select any four (4) of the five sets of questions.

1. Companies do not usually set a single price, but rather a pricing structure that reflects variations in different factors. After developing pricing strategies firms often face situations in which they need to change prices. (a) Explain factors that influence initial prices and situations that cause price changes. (b) In a pricing strategy context, discuss whether there is a conflict between profit and volume (e.g., sales, market share) objectives? Doesnâ??t one lead to the other? (c) In general, explain the concept of elasticity

2. Explain â??premiumâ? pricing and price-quality inferences. Visit the Starbucksâ?? website (www.starbucks.com). Discuss how the website enhances the firmâ??s ability to obtain premium prices. Is the website consistent with Starbuckâ??s image? Give viable target markets for Starbucks. Describe Starbuckâ??s positioning issues. Do they have any low-cost competitors? If so, how should they respond to these competitors? In framing the boundaries of possible prices for a product, what sets the ceiling, or the highest level at which the price should be set?

3. IKEA has been a practitioner of value pricing (i.e., win loyal customers by charging a fairly low price for a high-quality offering). Visit the IKEA website. Does the website enhance the firmâ??s ability to continue with value pricing? Is value pricing just a matter of simply lowering prices? Describe viable target markets for IKEA. Has IKEA changed the way people shop for furniture? Explain

4. Consider product-mix pricing. Explain the roles, and give examples, of loss-leader pricing, captive pricing and product-bundling pricing. What challenges (e.g., from their competitors, customers, the trade, etc.) do marketers face in using these pricing tactics? Do marketers need to modify their â??normalâ? price-setting logic in using these tactics?

5. Prices are often set to satisfy demand or to reflect the premium that consumers are willing to pay for a product or service. (a) Take a position. Provide persuasive arguments on one side of the following: â??Prices should reflect the value that consumers are willing to pay versus prices should primarily just reflect the cost involved in making a product or serviceâ? (b) Do you agree/disagree with the following (explain your response) â??Consumers are price-takers and accept prices at face value. Thus, price setting by firms should be independent of the rest of the marketing programâ?