Question

Discuss pricing strategies and explain each of the pricing policies.

b. Explain the push and pull strategies that companies adopt to communicate with customers.

Answer 1

a) Companies adopt pricing policies to rate their offerings. Pricing policies of the company must be aligned with the vision as well as strategic objectives of the company. Pricing policy is developed in a way that it draws customer inclination towards the company and its offerings. The different pricing strategies followed by companies are as follows:

· Competitive pricing: The company fixes pricing of its offerings based on the prices fixed by competing companies

· Value based pricing: The company chooses the pricing of its offerings based on the value addition which it brings in the lives of the consumers

· Premium pricing: The company fixes the price of its products at a rate, higher than the market average, so as to tag it as unique and premium

· Penetration pricing: If the company is trying to enter a new market, it will fix rate of its products at a fairly lower price than the average market rate

· Price skimming: The company launches its product at a comparatively higher price and then lowers the same, as the product becomes old and established in the industry

b) Push and pull strategies are used in the Supply Chain Management of the company. These are ways in which the customer demand towards a product is decided upon. In a push strategy, the product is projected to the customers, awareness is created for the same and accordingly customer demands get driven. In a pull strategy, the company tries to develop long term association with the customer. In the pull strategy, the company comes up with various interventions to pull the customers to its offerings. Customer requirements and disposition is kept in the center of the SCM of such company.