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To Create This Type of Strategy, the Current Price Method is Used :

In other words, These strategies are influenced by the competitive situation and the perceived value of the product (ie the degree of differentiation). Since competition is determined by the market structure, we report the decisive degree of freedom for each structure:

  •  differentiated monopoly or oligopoly: a lot of autonomy
  • monopolistic competition: autonomy exists but is limited by the intensity of competition
  • competition and undifferentiated oligopoly: interdependence
  • need to identify competitors
  • existence of a differentiation (positive or negative) between the firm’s product Cyprus Mobile Number List and that of its competitors

C. Demand-based pricing strategies

In this case it is the customer who chooses the products that will be sold. In other words, The elasticity of demand directly measures the sensitivity of customers with respect to price and makes it possible to calculate the Cryp Email List quantities required for different price levels; if the elasticity is negative, an increase in price reduces the quantities sold.

  • In other words, the “simple” elasticity of demand=ΔQ/Q|ΔP/P
  • the “crossed” elasticity of demand= ΔQa/Qa|ΔPb/Pb

Optimal P calculation

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Factors determining sensitivity(rigid):

  • unique value effect: product di4) The mark-up price : it is similar to the target price, in the sense that it allows you to recover, in addition to direct costs and fixed costs, a certain profit margin. In this case, however, the profit margin is calculated as a percentage of sales (α), and not as a return on invested capital. In other words, It is obtained by adding a standard markup to the technical price (which equals costs and revenues)fferentiated from competitors
  • notoriety of substitutes: lack of market transparency
  • difficulty of comparison
  • In other words, total expense: the expense represents a small part of the buyer’s income
  • ultimate benefit
  • shared cost (groups)
  • past investment: the product is “necessary” for the consumer
  • quality ratio
  • stash effect
  • defects
  • performance
  • quality strategy (B2B)
  • specific product.

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