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Pricing strategies of Amazon - Essay Example
Author : smithamproviden
Pages 12 (3012 words)
Pricing Strategies of Amazon Name: Instructor: Task: Date: Pricing Strategies of Amazon In the business world of corporate entities, varieties of factors have to be considered in order to ensure unrivalled success. Companies and business entities are always formulating ideas and strategies that eventually ensure the success of the products, merchandise or the services that they offer…
231). The most important factor to consider is the pricing of a product, as it is from this that the company will be viewed by the other entities in the industry and also potential customers. In achieving this, companies in general consider three main factors in coming up with viable pricing strategies that ensure their overall success. These are in terms of their basis of laying emphasis. There are the cost-based pricing strategies, which focus on a means of determining prices through incorporation of profit essentials in the product (Cryns 2002, p. 120). Moreover, there is the pricing based on customer observation whereby a business entity considers the best price that could fit accordingly to the customer base of that product. In addition, there is the pricing based on competitor substitutes, which considers competitor pricing to come up with prices that would most likely put a business at a better position for proper and advantageous competition. While these are the main pricing criteria that most companies consider prior to formulating a viable strategy, other entities such as Amazon maximize on their potential in regards to formulating their pricing strategies (Wuebker 2008, p. 111). ...
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