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Name Course Course Instructor Date Pricing When pricing a product, many factors need to be put into consideration. Largely, the entire customer perception regarding the company’s business mostly revolve around the first price. Value adding techniques are better used while determining the price to charge on a particular product than opting for deep discounts.
Ideally, skimming refers to setting high prices based on the value of the product (Holden and Burton 51). The features of the new washing machine are likely to excite the customers, creating no need for the company to opt for a discounted pricing strategy. The financial value of the product is strength to the organization. The new washing machines is built on new technology that requires very little water and energy to clean clothes. Therefore, customers are unlikely to put cost into consideration and instead consider the functionality of the washing machine. According to Holden and Burton (51), most customers buy a product due to the service they receive from the product, and not on price. In fact, very few customers choose to buy a product due to pricing, leaving the biggest customer base on the service side. Low pricing could make the customers perceive the washing machine as inferior. A low price intended to attract more sales might lead to decrease in sales in the later days, as customers’ debate on the standards of the product. Cheap products are considered to be of substandard quality while highly priced products are considered to be of high quality. ...
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