Question

Online Educational Systems’ (Online) has developed a package to deliver integrated curriculum and face to face group learning, for all levels of students around the world, due to the Covid-19 pandemic. Online has asked you to research customer preferences and to recommend a pricing policy. There are limited price differences relating to the timing of classes in the Northern Hemisphere. However, for Southern Hemisphere classes running a class at or below 45 students (normal class size is 50) costs significantly more for Online to run the class.

Required (200 words):

a. In addition to customer preferences, what information would you like to gather before recommending a pricing policy? Explain why each item you list is relevant.

Answer 1

In the given case,the product you offer to the market is virtual class.Before constructing a pricing policy,one should have the knowledge of costs,value,demand and competition of product to be offer to the market.You should have the information regarding variable and fixed cost associated with running virtual class.Since,fixed cost and variable cost is the least amount that you want to recover from the sale of the product.Further,we need to know what is your strategy regarding setting of price such as offering lower prices to increase sales volume or higher prices to decrease backlog etc.

Further,we can construct the pricing policy having regard to value that the product served to the market.Value based pricing is not just creating customer satisfaction,it could also lead to greater sales.Demand based pricing policies ar like value prices,not fully concerned with costs.Instead they concentrate on the behaviour and characteristics of customer and the quality of the product.With a competiitive based pricing policy,prices are set by determining what other companies competing in the market charge.This pricing policy allows to set prices quickly with relatively little effort,since it does not require as accurate market data as the demand pricing.In this pricing policy,price of the product can be above,or on par with the competitors' prices and there by influence customer perceptions of the product.