Price and Channel Strategy
Dynamic and Static Pricing Strategies
Price constitutes an important element of the marketing mix. It significantly influences profitability and business growth. Price is basically the cost the consumer incurs in acquiring the product or service on offer. It is the only element in the marketing mix that has direct implications on revenue. Major factors that influence pricing decisions include cost, consumer preferences, competition, and distribution channels (Baines, Fill & Page, 2011). Within the global or multiregional context, price setting may be even more complex as additional factors have to be considered, such as foreign exchange costs, inflation, and export costs (Wilson & Gilligan, 2005).
Generally, pricing may be static or dynamic. Static pricing entails maintaining the same price for all customers regardless of changes in market conditions (Lamb, Hair & McDaniel, 2012). While this option minimises administration difficulties, it may not satisfy all market segments (Baines, Fill & Page, 2011). For instance, high-end consumers may equate low prices to low quality or product inferiority. Static pricing may particularly be ineffective in the global or multiregional context as the organisation serves diverse market segments.
Dynamic pricing...
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