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Discussion Questions Related To Amazon Product Life Cycle Question Answers

1. Explain the pricing issues that concern marketers.

The largest pricing issue that impacts marketers is related to competition. If marketers are marketing a product that can be easily copied or replicated, competitors can enter the market at a lower price to take market share. If this occurs, marketers must be able to position the value proposition of the product without consideration of price. Here, marketers must emphasize other features that justify the higher price point or that allows the product to simply maintain its price point. Luxury goods are typically able to do this by positioning the product as a exclusive, high-end, quality product. This ultimately allows the company to mitigate pricing pressure as consumers are attracted to the product due to its high price and exclusivity.

2. Explain how price serves as a cue to quality.

Price serves as a que for quality as higher priced products are often perceived as being higher quality. The truthfulness of the above statement doesnt matter as much as the perception of price and quality. Marketers have masterfully occupied a niche within the consumers mindset that equate higher price with higher quality. As a result, goods that are mediocre but are sold at a high price often can command the Premium label when in actuality that are standard products. This occurs in alcoholic beverage industry where high-quality packaging, placement on shelves, and price point tend to point to premium product. However, many of these products are using marketing gimmicks to deceive the purchasing public into believing their products are premium. In actuality there is occasionally very little difference.

3. Describe and discuss referent pricing.

Referent pricing is best summarized as the price consumers expect to pay for a certain good or service. Here, consumers often review competitor pricing, online...

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…next day delivery as it investing heavily in a logistics network to rival that of UPS and FedEx. In addition, the company has continued to make further investments in cloud computing in order to attack more companies to its platform. The company already benefits from very strong network effects as it relates to its overall ecosystem. Many merchants use it system to sale goods online, likewise many consumers use the platform to make routine purchases. Innovations such as the Kindle and Alexa have allowed the Amazon to further entrench itself into households. This has allowed the company to leverage data to allow the company to use artificial intelligence and predictive analytics. From a product lifecycle perspective, the company is now better able to innovate and create new products that consumers may not be aware that they need. In addition, with improved data, and data analytics, Amazon can expand the product…

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References


1. Abel, R. 1978. The role of costs and cost accounting in price determination. Management Accounting (April): 29-32.


2. Anderson, E. and D. Simester. 2003. Mind your pricing cues. Harvard Business Review (September): 96-103. (The effectiveness of sale signs, prices that end in 9, signpost items, and pricing guarantees).


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