What are the available pricing strategies for producers of a new product?

  

Selecta new, realistic good or service for an existing industry, preferably an industry you current work in or one in which you are interested in working.Develop a 1,400-wordevaluation of pricing strategies available producers of your selected product.This will include statements about the market structure and the elasticity of demand for the product, based on text book principles and real world products under development.Identify the market structure of the industry (monopoly, oligopoly, monopolistic competition, pure competition).Determine elasticity of demand for various quality ranges of the product based on textbook theory and judgments about the degree of luxury vs. necessity represented by various brands (e.g. a luxury car vs an economy car).Determine how pricing relates to elasticity of demand for competing models.Explain how changes in the quantity supplied as a result of pricing decisions might affect the company’s marginal cost, marginal revenue, and market share as production volume rises. What reaction might be expected by other producers if one producer changes its pricing strategy?Determine strategies that a company might use to develop product differentiation and market segmentation. What alternative non-pricing strategies are available? What alternative non-pricing strategies can be used to increase barriers to entry?Discuss how producers might alter the mix of fixed and variable costs to support their pricing strategy.Format the assignment consistent with APA guidelines.

Introduction:
The industry in which a company operates can significantly affect its pricing strategy. A new product must be realistically priced to survive in a competitive business environment. Therefore, businesses need to be well-versed in pricing strategies in order to thrive. This report aims to evaluate the pricing strategies available to producers for a new service or product in an existing industry.

Don't use plagiarized sources. Get Your Custom Essay on
What are the available pricing strategies for producers of a new product?
Just from $13/Page
Order Essay

Description:
This report focuses on the evaluation of various pricing strategies that can be implemented by producers within a given industry. The report will examine textbook theories on market structures, elasticity of demand, and pricing, as well as providing examples of real-world products that are currently in development. This will provide practical insights on how pricing strategies can be used to gain a competitive advantage, attract customers, and increase profits.

The market structure of the industry will be identified as either monopoly, oligopoly, monopolistic competition, or pure competition. The report will determine the elasticity of demand for various quality ranges of the product, based on textbook theory, and the degree of luxury versus necessity represented by different brands. Additionally, the report will evaluate how pricing relates to the elasticity of demand for competing models.

Furthermore, this report will also explain how changes in pricing decisions may affect the company’s marginal cost, marginal revenue, and market share as production volume increases. It will also explore the possible reactions of other producers in the industry if one producer changes its pricing strategy.

Finally, this report will suggest strategies that a company might use to develop product differentiation and market segmentation. It will also consider non-pricing strategies that can be used to increase barriers to entry, as well as examining how producers might alter the mix of fixed and variable costs to support their pricing strategy. The assignment will be formatted consistently with APA guidelines.

Objectives:
1. To select a new, realistic good or service for an existing industry
2. To evaluate pricing strategies available to producers of the selected product
3. To identify the market structure of the industry and the elasticity of demand for the product
4. To determine how pricing relates to elasticity of demand for competing models
5. To explain the impact of changes in quantity supplied on marginal cost, marginal revenue, and market share of the company
6. To determine strategies for product differentiation and market segmentation
7. To evaluate alternative non-pricing strategies and their potential impact on barriers to entry

Learning Outcomes:
1. Select a new product that can be realistically implemented in an industry of interest
2. Analyze various pricing strategies available to producers of the selected product
3. Identify the market structure of the industry and its impact on pricing decisions
4. Understand the concept of elasticity of demand and its relation to pricing decisions
5. Analyze the impact of changes in quantity supplied on marginal cost, marginal revenue, and market share
6. Develop effective strategies for product differentiation and market segmentation
7. Evaluate non-pricing strategies and their potential impact on market barriers.

Headings:
1. Introduction
2. Selecting a New Product
3. Market Structure and Elasticity of Demand
4. Pricing Strategies and Competition
5. Quantity Supplied and Marginal Analysis
6. Strategies for Product Differentiation and Market Segmentation
7. Non-pricing Strategies and Barriers to Entry
8. Conclusion

Solution 1:

Introduction:
The tourism industry offers various services that cater to the needs of people traveling for leisure or business. In recent years, digital nomads, a growing number of self-employed individuals who use technology to work remotely, have been a significant customer demographic. Digital nomads require a specific type of lodging facility that offers an efficient workspace, high-speed internet, and a social environment for networking. Co-working hostels have emerged as a popular option for digital nomads and other budget-conscious travelers.

Market Structure and Elasticity of Demand:
The co-working hostel industry falls under monopolistic competition, where there are many producers, but each product is slightly differentiated. Entrepreneurs are drawn to the co-working hostel industry due to the low entry barriers, and new hostels are opening up frequently. Hostels that cater to digital nomads and long-term travelers have relatively elastic demand, where the price increase leads to a decrease in demand.

Pricing Strategies:
Co-working hostels can adopt a skimming pricing strategy where they charge a higher rate to capture early adopters and then decrease prices as new competitors enter the market. Another pricing strategy they can use is bundle pricing. Hostels can bundle lodging, co-working space, and access to networking events to offer a discounted package and increase overall revenue. Dynamic pricing, where prices adjust based on the level of demand, can also be used to maximize revenue during peak periods.

Changes in Quantity Supplied:
As hostels adjust pricing, and quantity supplied increases, the marginal cost of the company decreases while marginal revenue increases, resulting in higher profits. However, increased production volume can result in a decline in market share due to new entrants into the market.

Product Differentiation and Market Segmentation:
To differentiate their products, co-working hostel companies can offer unique amenities, such as rock climbing walls, yoga classes, etc. Market segmentation can help hostels market their services to specific customer niches, creating a loyal customer base. Hostels can use alternative non-pricing strategies such as location, atmosphere, and brand image to increase barriers to entry.

Solution 2:

Introduction:
In the healthcare industry, telemedicine has emerged as a popular choice for people seeking medical advice and consultation. Telemedicine offers an alternative to visiting healthcare facilities and can reduce costs and increase access to healthcare. However, telemedicine requires specialized equipment and software that can be costly, resulting in high startup costs for entrepreneurs entering the market.

Market Structure and Elasticity of Demand:
Telemedicine falls under monopolistic competition, with multiple producers offering services that may differ in terms of quality and branding. Customers have a relatively inelastic demand for telemedicine services, where price changes have little effect on demand. Telemedicine services characterized as necessities, such as emergency consultations, have highly inelastic demand, while luxury telemedicine services, like virtual consultations for cosmetic procedures, have relatively elastic demand.

Pricing Strategies:
To maximize their profits, telemedicine providers can use a price skimming strategy, charging a higher price for early adopters and then gradually lowering prices to capture more price-sensitive customers. Another pricing strategy is penetration pricing, where providers offer a lower price to gain market share and increase demand. Telemedicine companies can also use value-based pricing, where pricing is based on the perceived value of the service to the client.

Changes in Quantity Supplied:
As telemedicine providers increase quantity supplied, their marginal cost decreases, while marginal revenue increases, leading to higher profits. Increased production volume can also result in lower prices due to economies of scale, leading to more significant market share. However, competitors may respond by using predatory pricing strategies to eliminate new entrants to the market.

Product Differentiation and Market Segmentation:
Telemedicine providers can differentiate their products by offering unique services, such as online access to medical records, video consultations with specialists, and quick delivery of prescriptions. They can also use market segmentation strategies targeting specific demographics, such as seniors, children, or international travelers. Alternative non-pricing strategies can be used to create brand differentiation, such as advertising partnerships with healthcare providers, insurance companies, and online pharmacy services. Telemedicine providers can also increase barriers to entry by investing in high-tech equipment and obtaining patents.

Suggested Resources/Books:

1. “Managerial Economics” by Luke M. Froeb, Brian T. McCann, Michael R. Ward, and Mike Shor
2. “Microeconomics” by Paul Krugman and Robin Wells
3. “Principles of Economics” by N. Gregory Mankiw
4. “Pricing Strategy: Setting Price Levels, Managing Price Discounts and Establishing Price Structures” by Tim J. Smith
5. “The Strategy and Tactics of Pricing” by Thomas T. Nagle and John E. Hogan

Similar Asked Questions:

1. What are the different pricing strategies available to producers and how do they impact the market structure of an industry?
2. How does elasticity of demand affect pricing decisions for luxury vs. necessity products?
3. What are some non-pricing strategies that can be used to differentiate a product or increase barriers to entry in a market?
4. How do changes in the quantity supplied as a result of pricing decisions impact a company’s marginal cost, marginal revenue, and market share?
5. How do producers determine the optimal mix of fixed and variable costs to support their pricing strategy?

Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more
× How can I help you?