Pricing Strategy
Price Reduction Strategy
What are the implications for revenue and profits of implementing the price cut?
The implications for revenue and profits are dependent on the demands and supply of the product. If there is not enough demand for the product, a reduction in the price of the product by 10% is unlikely to boost the demand of the product. On the other hand, if there is sufficient demand of the product, a 10% reduction in the price of the product will have direct effect on the revenue and profits of the company. The reasoning behind is that the price elasticity of the product is 2.5%, higher than 1. Therefore, a reduction of 10% in the price will have about 2.5 times effect in the demand of the product. As far as meeting the target by the marketing managers, the managers would find it easier to meet its revenue, as...
To avoid repeating negative historical experiences, regulatory regimes need to block the control and domination by networks/platforms. In the report, "Infrastructure and Development: A Critical Appraisal of the Macro Level Literature," Stephane Straub (2007) reported that at times, in some developing companies, "the hope of getting a fixed-line installed is a distant and costly dream" (p. 4). Meantime, the primary option for the individuals waiting for fixed-line telecommunications services
Economics A price discrimination strategy is one where different customers are charged different amounts. The price charged for my shop's submarine sandwiches will therefore be different for locals than for visitors. There are a number of ways to achieve this. In the context of a sandwich shop, the prices are going to be listed publicly on the menu, so it is impossible to openly discriminate with respect to prices. One technique
Price Elasticity Airlines The piece "Airlines try cutting business fares, find they don't lose revenue" explains how major airline firms in 2002 cut their business travel fares in an attempt to generate more business "and bring back business travelers who are staying at home, buying in advance or running to discount airlines" (McCartney, S. November 22, 2002). Of particular interest in this dynamic is the effect on total revenue generation resulting
Strategic Advantage Introduction and Description of the Problem Tesco is the market leader in the UK supermarket industry, with a share of 28.8% as of the summer 2014 (Statista 2014). Other major firms in the industry are Asda, Sainsburys and Morrisons, but the industry overall is highly fragmented. Most firms in the industry compete in the mainstream segment of the market, including Tesco. Few major players operate with a premium platform. The
AMAZON'S AND WAL-MART'S DISTRIBUTION CHANNELS Understanding Amazon's and Wal-Mart's Distribution Channels It is common knowledge that a change in the business strategy has a serious implication on the performance and success of a company in any industry. For example, Amazon Company is popular for the sophisticated e-commerce and most of its customers shop their products from the company online. However, if the company creates many stores in the different parts of
As such, when evaluating the change in profit, we need to consider both alternatives and how the possible responses from the competitor will affect it. In the first case, with no response from the competitor, as I have mentioned previously, net sales are likely to increase due to positive price elasticity. In order to evaluate whether the net revenue is modified, we should use a figure example, considering the quantity
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