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After a pricing objective has been solidified, what else must a firm look at prior to finalizing pricing decisions?
Defining the pricing strategy to be adopted in a particular market, a company must be able to solidify the essential objectives. However, transferring from the given stage to the process of finalizing pricing decisions would be wrong. In addition to the first step, one should also consider the pricing strategies that can be adopted in the target business environment (Stevens, Liudon, and Nukkei 232).
Additionally, one might consider the issues that the entrepreneurship is likely to face in the context of the target environment when carrying out the financial strategy of its choice. There is no need to stress that the economic, financial, and legal factors that a company will be exposed to in an alien environment are strikingly different from the ones of the home market. Herein lies the importance of carrying out the two steps suggested above before implementing the strategy (James 25).
Define price discrimination and explain its legality
The phenomenon of pricing discrimination is typically referred to as the strategy that sets different prices for the same goods or commodities, therefore, compelling different customers to pay different amounts of money for the product in question. In other words, the approach allows the retailer to set the highest price possible that a specific customer is ready to pay for the goods offered to them.
One might argue that the concept of price discrimination is illegal in its nature as it implies stratification of the target audience based on a specific characteristic feature thereof. However, the principles that lie at the core of the differentiation are what makes a difference and, therefore, may turn pricing discrimination either legal or illegal. The approach is perfectly fine when it neither violates any price-fixing laws, nor implies racial, ethnic, or religious profiling of the customers (Mahanty 302). In any other scenario, the concept of pricing discrimination must be viewed as illegal and, therefore, terminated immediately as a pricing strategy.
How did Walmart utilize a maximizing profit strategy?
When designing the approach that would propel it to the top of the global market, Walmart leaders viewed the idea of maximizing profits as the primary notion that would gear the entrepreneurship toward stellar success. The very strategy is rather basic; it implies a detailed analysis of the company’s processes so that the price-output correlation could be leveled to increase the profit margins to the greatest extent possible (Graduate Management Admission Council 226).
Walmart managers, however, consider the refusal to carry out a self-regulatory policy as the primary tool for maximizing profits (Figueroa par. 59). On the one hand, the suggested approach is likely to lead to a rapid and successful growth, which Walmart has been witnessing recently. On the other hand, the lack of control over the ethical premises that important company decisions are based on clearly is a reason for concern, mostly for legal safety reasons.
Explain pricing strategies that are utilized in the introductory stage of the product life cycle
The introductory stage of the product life cycle is often viewed as the one that offers the greatest opportunities yet also represents the product at its most vulnerable state. The focus, therefore, should be primarily on the people that express the willingness to buy the product or service under consideration. In other words, innovators are the primary audience to be considered. Therefore, it will be sensible to apply the pricing strategies that will invite them to try the goods and have new experiences. Particularly, the cost-plus pricing, which is a combination of direct, material, and overhead costs (Liozu and Hinterhuber 142), should be viewed an option.
Works Cited
Figueroa, Meleiza. Wal-Mart’s Real Cost. 2006. Web.
Graduate Management Admission Council. The Official Guide for GMAT Verbal Review 2015. New York, NY: John Wiley & Sons, 2014. Print.
James, Lowellyne. Sustainability Footprints in SMEs: Strategy and Case Studies for Entrepreneurs and Small Business. New York, NY: John Wiley & Sons, 2014. Print.
Liozu, Stephan, and Andreas Hinterhuber. The ROI of Pricing: Measuring the Impact and Making the Business Case. Routledge, 2014. Print.
Mahanty, Aropp K. Intermediate Microeconomics with Applications. New York, NY: Academic Press, 2014. Print.
Stevens, Robert E., David Liudon, and Ronald A. Nukkei. Marketing Your Business: A Guide to Developing a Strategic Marketing Plan. New York, NY: Routledge, 2013. Print.
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