Learning Team A Reflection of Week Three Objectives
Patrece James, Angela Roth, Michele King, Domingo Cuison
University of Phoenix
Professor David Flesh
April 16, 2012
Week 3 learning objectives are 1) Determine pricing strategy to meet organizational goals;
2) Determine ways to create non-price barriers to entry based on market ...view middle of the document...
In this strategy, companies set a high price in order to attract customers who do not care as much about price and to signal the product or service is high quality. To maximize market share, companies set a low price. This works well if there are cost savings from selling in volume. Lastly, offering price discounts is another strategy used to meet marketing objectives. The discount could be based on quantity purchased or method of purchase. For example, cash purchasers could be offered a discount.
Ways to Create Non-price Barriers. The factors that prohibit firms from entering an industry are called barriers to entry. Most utility companies, such as gas, electricity and water are government regulated and typically monopolies. In pure monopoly, strong barriers to entry effectively block all potential competition. Somewhat weaker barriers may permit oligopoly, a market structure dominated by a small number of sellers. Examples of this may be telephone and cable companies. So barriers to entry are pertinent not only to the extreme case of pure monopoly but also to other market structures in which there is some degree of monopolistic conditions and behavior.
Ways to Increase Product Differentiation. One way to increase product differentiation based on a monopoly market structure is to categorize the market into elastic and inelastic groups. The example given in the book separates small business and students when selling a software package. Small...