Pricing strategies

Week 2 Discussion 2

Pricing strategies

Arby’s restaurants discount their products or give customers freebies in order to get more sales. During special holidays they have pocket friendly prices. Arby’s prices food higher and then increases the value of the food. I agree with these strategies because through their implementation, they make customers to feel that their needs are taken into consideration. During the holiday season customer expect low prices and attractive offers by Arby’s thus making them wish to buy from them.

The challenges which create an effective pricing strategy are currency fluctuation, anti-dumping laws and inflation. Currency fluctuation contributes to the price decreasing or increasing thus having some immediate consequences for the consumers. When anti-dumping laws are in place, a foreign company is limited to sell their goods or services and in the long run causing competition to the domestic companies. In the case of inflation, the decrease in money value causes price of products or services to go high. To manage the challenges of price strategies, benchmarking of pricing may be used to limit prices from increasing without warning. This also includes managing prices across all pricing channels in the wholesale and retail market.

References

Sugars, B. (2008). 7 Biggest Mistakes in Setting Prices. Entrepreneur. Retrieved 15 October 2016, from https://www.entrepreneur.com/article/196678

Lutz, A. (2016). 3 reasons Arby’s business is on fire. Business Insider. Retrieved 15 October 2016, from http://www.businessinsider.com/3-reasons-arbys-business-is-on-fire-2015-2

                     Response to Kelly Pratt

Hello Kelly, I like the way you talked about promotion of sales and this got me thinking of effective ways of sales promotion. In this case I realized there are three major ways to promote sales. The three ways include targeting the customers through gaining their trust as you market your products. Planning incentives requires knowing what to use to get the customers to buy your products and services. Knowing what achievement you want through promotions you will help to attract customers. What other ways can you use to promote more sales?

                    Response to Lauren Sparks
              Hello Lauren, I also think lowering of prices may affect the products or services you are selling in a very negative manner. If a company lowers its prices it may risk having a bad reputation of not being able to keep up with the competition. Many customers may opt to go to another company which has not lowered its prices because they think due to price lowering may equal to quality being low. Lowering of prices may also lead to the losses which affects entrepreneur skills. What ways do you think lowering of prices affects the marketing of a company?