Question

Waving Through the Window You and your two roommates are starting a window washing service to help put yourself through college. There are two other well-established window washing services in your area. Should you set your price higher or lower than that of the competition? Justify your answer. One roommate believes the most important objective in setting prices for the business is to generate a large profit, while keeping an eye on your competitors’ prices; the other roommate believes it is important to maximize sales and set prices according to what your customers expect to pay. Who is right and why? How do the number of competitors in the market in this situation affect YOUR pricing strategy?

Answer 1

Answer:

1. There are two other pet grooming services in our area and we are expecting more competition from them. We are decided to start grooming service and our service will be new to the customers as it was the beginning we like to have the lower prices because it was also a kind of strategy to compete with the competitors. At the beginning onwards we announced the higher rates people will not show more interest. Many of the people nature was if there was decrease in rates they wants to have that service so that by using that and to attract the people lower prices will be more beneficial. Low prices and best quality to the customers will automatically leads to the success.
2. According to my point of view, first roommate was correct because in business without setting the price and leaves the price opinion to the customer leads to loss. If we leave opinion to them they will amount as least as possible. So that, by giving the quality services with some intended low process can be helpful while competing with others.
3. Pricing strategy should be done according the competitors in the market and our price should attract the customers. If our price was low and we are offering the best quality then competitors will definitely affect our pricing strategy by offering some other offers and some discounts etc. We should also be prepared to overcome all these hurdles and prepare the well planned grooming service. Competitors will always think that how to dominate the other services. While fixing the price customers should adopt and they should be loyal with our service.

THANK YOU!