Discussion

Week 7 Discussion

Hello class 

In my Indonesia shoe company, I will employ psychological pricing to boost sales on the sports shoes. Shpanya (2014) explains psychological pricing as a marketing strategy used by retailers to take advantage of customers, whether they are operating offline, online or in multiple channels. This will help the company in boosting its sales and conversions. It will incorporate variety of pricing tricks in enticing shoppers like charm pricing, bundling to reduce purchasing pain, anchored pricing, buy one get one  free and flash sales. All these tricks together will play with the psychology of the customers to increase sales and the company’s profit. 

The type of supply chain that I will employ in the company is the “efficient” supply chain model. The reason why I have chosen this model is because of the intense market competition as there are competitors who are fighting for the same group of customers especially those who cannot perceive major differences in their value proposals. Therefore, production should be scheduled based on sales expectations along production cycle length. For its success, the company will offer the best price and perfect order fulfilment. My focus as the manager is to offer promoting maximum end-to-end efficiency.

Reference

Shpanya, A. (2014). Five ways to use psychological pricing. Retrieved from https://econsultancy.com/blog/65099-five-ways-to-use-psychological-pricing/

Response to Baljinder Shergill

Hello Baljinder, I like both your discussions on pricing strategy and supply chain strategy that you will use in your shoe company. Effective use of global supply chain will be advantageous to your company as it will be able to penetrate to foreign countries. I like the way you have illustrated your strategy using another business-Wal-Mart which has used that strategy effectively. To achieve effectiveness in your strategy, you should improve visibility as your first priority. Another important way of improving your company is by protecting your gross margin. As I conclude, how will you improve your gross margins?

Response to Nehemiah Anderson

Hello Nehemiah, I like your discussion concerning your shoe company in Egypt. You have discussed both the supply and pricing strategy to be used in your company. One known advantage of your pricing strategy is the fact that a company may make money while others markets are falling. This occurs in times when markets are in free fall. You can embrace this chance by making profit as everybody else is losing. Another idea that has caught me intellectually is using the Wal-Mart supply chain model in your company. As you have stated, Wal-Mart believes in “getting the goods to the people as efficiently as possible” in using this strategy, how will you ensure its effectiveness?