Preview Rubric Step 6: Individual Doctoral Project Assessmen

6242021 Preview Rubric Step 6 Individual Doctoral Project Assessmen

Analyze a company's pricing objectives and strategies, considering factors such as profit maximization, sales maximization, and customer retention. Each company should be examined in terms of how its pricing aligns with its market positioning, customer perceptions of value, competitor actions, and overarching business goals. Specifically, discuss the rationale behind chosen pricing tactics, methodologies, and the expected impact on business performance, growth, and customer loyalty. Provide scholarly references to support your analysis and include real-world examples where applicable.

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Pricing strategies are critical components of a company's marketing mix that significantly influence its overall performance and customer perception. The selection of appropriate pricing objectives—such as profit maximization, sales growth, and customer retention—depends on multiple factors, including the industry, target market, competition, and long-term corporate goals. A comprehensive understanding of these objectives can help firms develop tailored pricing tactics that foster sustainable profitability and market competitiveness.

Profit maximization remains a fundamental pricing objective for many organizations, aiming to achieve the highest possible profits by setting prices that cover costs and generate surplus. This approach is particularly relevant in highly competitive markets or mature industries where margins are compressed, and efficiency improvements are necessary (Nagle & Müller, 2017). Companies can utilize cost-based pricing and break-even analysis to ensure prices are aligned with their financial targets. For instance, luxury brands often set premium prices to reinforce the perception of exclusivity and quality, thus supporting profit goals while maintaining brand integrity (Kapferer & Bastien, 2012).

Conversely, sales maximization focuses on increasing the volume of sales, which can translate into market share expansion and customer base growth. This strategy is often employed during new product launches or in markets with high price sensitivity. For example, emerging tech startups may initially set lower prices to attract early adopters, with the goal of establishing market presence and customer loyalty (Andrews & Scharfstein, 2021). The challenge lies in balancing this objective with profit considerations; thus, companies often adopt a hybrid approach, combining demand-based pricing with targeted discounts or promotional activities.

Customer retention forms another vital pricing objective, especially in service industries where long-term relationships are crucial. Setting prices that reflect perceived value and foster customer loyalty can lead to repeated purchases and positive word-of-mouth advertising (Kotler & Keller, 2016). For example, subscription-based services often implement tiered pricing models to cater to different customer segments, with loyal customers receiving discounts or added benefits. Moreover, dynamic pricing and personalized offers are increasingly utilized to enhance perceived value and strengthen customer bonds in digital ecosystems (Shankar & Carpenter, 2020).

Effective pricing strategies integrate various approaches to meet short-term financial goals and support long-term sustainability. Demand-based pricing adjusts according to customer willingness-to-pay, while cost-based pricing ensures financial viability through break-even analysis. Target return strategies aim to meet specific ROI benchmarks, aligning pricing with investor expectations. In the context of the healthcare industry, for example, service providers might employ value-based pricing by demonstrating tangible benefits to patients and insurers, supporting both profitability and social value (Porter & Lee, 2013).

In conclusion, selecting appropriate pricing objectives and strategies requires a nuanced understanding of market dynamics, customer perceptions, and organizational goals. Companies that effectively balance profit maximization, sales growth, and customer loyalty are better positioned to sustain competitive advantages and foster long-term success. Future research should explore how technological advances—such as AI-driven pricing algorithms—can further refine pricing decisions and enhance strategic adaptability (Chen & Xie, 2019).

References

• Andrews, D., & Scharfstein, D. (2021). Strategic pricing and market entry in technology sectors. Journal of Business Strategies, 37(2), 157-172.
• Chen, H., & Xie, K. L. (2019). The impact of AI-driven dynamic pricing on consumer perceptions and behaviors. Journal of Marketing Analytics, 7(3), 147-159.
• Kapferer, J. N., & Bastien, V. (2012). The Luxury Strategy: Break the Rules of Marketing to Build Luxury Brands. Kogan Page Publishers.
• Kotler, P., & Keller, K. L. (2016). Marketing Management (15th ed.). Pearson.
• Nagle, T. T., & Müller, G. (2017). The Strategy and Tactics of Pricing: A Guide to Growing More Profitably. Routledge.
• Porter, M. E., & Lee, T. H. (2013). The Strategy That Will Fix Healthcare. Harvard Business Review, 91(10), 50-70.
• Shankar, V., & Carpenter, G. S. (2020). Value perceptions and digital pricing strategies: The emerging role of personalization. Journal of Interactive Marketing, 49, 62-75.