Question

In: Finance

Critically discuss how the impact of ICT on contracting costs might influencepricing strategies

Critically discuss how the impact of ICT on contracting costs might influencepricing strategies

Solutions

Expert Solution

Impact of information communication technology on contracting cost might influence the pricing strategy as-

A. When there will be application of information communication technology in the overall business structure, it will lead to contraction of the cost and it will also lead to managing of the price on the lower side, because the company will be trying to pass onto the benefits of of lower cost to the existing and the potential customer because these companies will want to benefit their customers from reduction of price because these strategies has led to reduction in the overall cost of the company.

B. Application of information communication technology leading to contracting cost will also be leading to offering the quality service to the customers and assessment of the payment capability of target customers so it will help in fixation of the price accordingly.

C. Reduced cost due to application of information communication technology will be helping in maintenance of an uniform price strategy because it is trying to capture a large amount of market share and retain the existing customers.

D. Reduced cost due to information Communication technology will be leading to production of products according to the need of various customers so prices can also be customised according to the quality of the product supplied.

E. Since it can be said that information communication technology will lead to increase of the market share of the company, then price penetration strategies has to be adopted in order to increase the overall market size.


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