C212 Discuss a major pricing strategy (i.e., cost plus pricing, competition-based pricing,, Thesis of Business Accounting

Download C212 Discuss a major pricing strategy (i.e., cost plus pricing, competition-based pricing, and more Thesis Business Accounting in PDF only on Docsity! C212 Discuss a major pricing strategy (i.e., cost plus pricing, competition- based pricing, break-even-based pricing, penetration-based pricing, premium pricing) aligned to your products and/or services’ position within the overall market strategy of the global marketplace. a.  Identify costs associated with developing and launching the new products and/or services. b.  Evaluate consumer acceptance of the price set for the new products and/or services. c.  Evaluate competitor prices for similar products and/or services. Pricing Strategy: Penetration-Based Pricing Penetration-based pricing is a strategy where the price of a product or service is initially set low to rapidly reach a wide fraction of the market and secure a significant market share. This strategy is often used when introducing new products or services to the market. a. Costs Associated with Developing and Launching New Products/Services The costs associated with developing and launching new products or services can be categorized into:  Research and Development Costs: These include costs for market research, product design, and testing.  Production Costs: These are the costs of manufacturing the product or setting up the service.  Marketing and Promotion Costs: These include costs for advertising, public relations, and other promotional activities.  Distribution Costs: These are the costs associated with getting the product or service to the customer. b. Consumer Acceptance of the Price Set for New Products/Services In a penetration pricing strategy, the low initial price is designed to attract customers and encourage them to try the product or service. This strategy can be very effective in gaining consumer acceptance, especially in price-sensitive markets. However, it's important to ensure that the quality of the product or service is not compromised, as this could negatively impact consumer perception and acceptance. c. Competitor Prices for Similar Products/Services In a penetration pricing strategy, the price is often set lower than that of competitors. This is done to attract customers away from competitors and to gain a significant market share quickly. However, it's important to carefully evaluate competitor prices and ensure that the low price will still cover costs and eventually lead to profitability.