Question

- Why is price such a difficult variable for marketers to control? What factors must they consider in setting prices?

- Driving volume is a key pricing objective for many businesses. Find an example of a marketer that uses each of the volume oriented pricing strategies. Do you think this approach is effective? Why or why not?

Answer 1

1. Price is hard for marketers to control because people have limited amount of money, so they can't set high prices. The prices have to be as low as possible so that people would be willing to buy, but at the same time marketers, when determining the final price, must consider their costs, competitors, investors, taxes, and product strategies.

Building profitability, boosting volume, matching the competition, creating prestige.

2. I don’t know of a company that uses all of these strategies. Each strategy has its perks. Walmart with its EDLP, JetBlue with its penetrating pricing. I would even go as far as to say that American Eagle uses the Loss-Leader approach when walking to the back to lookthrough the clearance section. Each strategy has its advantages. So I would have to say that I wouldn’t use them all at once, but weigh out and see which one would benefit me the most when owning a business.