Unit 3 Examination: Small Business Management

Unit 3 Examination140bam 418 Small Business Managementmultiple Choi

The assignment provides a set of multiple-choice questions related to small business management, covering topics such as marketing plans, demographic trends, data analysis, customer service, time compression management (TCM), marketing costs, advertising media, pricing strategies, international trade, e-commerce, and business growth strategies. Additionally, there is a written assignment prompt asking students to select and answer one of three questions:

1. What pricing strategies are available to manufacturers? Examine each, why it is used, and what it does for the manufacturer.
2. Discuss joint ventures, identifying the two primary types, and explain why a small business might consider using a joint venture to go global.
3. Analyze the criteria for an ideal domain name.

Students are instructed to include their personal and course identification information on each page, write their responses in essay format with an introduction, body, and conclusion, and submit as a double-spaced Word document using Times New Roman, 12-point font. The responses should be approximately 1-2 pages for undergraduate, 2-3 pages for graduate, and 4-5 pages for doctoral levels, with originality emphasized to avoid plagiarism.

Paper For Above instruction

The chosen topic for this paper is: What pricing strategies are available to manufacturers? Examine each, why it is used, and what it does for the manufacturer.

Pricing strategies are crucial components of a manufacturer’s marketing mix, directly influencing sales, profitability, and market positioning. This essay explores various pricing strategies, their purposes, and their benefits for manufacturers, providing insights into how strategic pricing can serve a company’s broader commercial objectives.

Introduction

Effective pricing strategies enable manufacturers to meet their financial goals, remain competitive, and adapt to market conditions. Different situations require different approaches, from penetrating new markets to managing product life cycles. Understanding these strategies helps manufacturers make informed decisions that align with their overall business plans.

Cost-Based Pricing

Among the fundamental strategies is cost-based pricing, where manufacturers set prices by adding a markup to the cost of producing a product. This approach ensures that all costs—materials, labor, overhead—are covered while providing a profit margin. It is straightforward and commonly used during early product development phases or in markets with little price competition.

Competitive Pricing

Competitive pricing involves setting prices based on competitors’ prices. Manufacturers analyze market rates and position their products accordingly, either matching, undercutting, or exceeding competitor prices. This strategy is essential in saturated markets where differentiation is challenging but price remains a critical factor for buyers.

Penetration Pricing

Penetration pricing aims to enter a new market swiftly by offering lower prices than competitors, attracting customers and gaining market share. Once customer loyalty is established, prices can gradually increase. This strategy benefits manufacturers looking to establish a foothold in a competitive environment or for new product launches.

Skimming Pricing

Skimming involves setting high initial prices to maximize margins on early adopters willing to pay a premium for innovative or high-quality products. Over time, prices are reduced to attract more price-sensitive customers. This approach is advantageous for tech companies or firms launching groundbreaking products.

Bundling and Price Discrimination

Bundling combines multiple products or services at a single price, encouraging customers to purchase more. Price discrimination entails charging different prices to different customer segments based on willingness to pay, maximizing revenue from diverse markets.

Psychological Pricing

This strategy uses pricing techniques that influence perceptions, such as setting prices just below a round number (e.g., $9.99 instead of $10) to create a perception of better value, thereby increasing sales.

Conclusion

In sum, manufacturers have a variety of pricing strategies at their disposal, each suited to specific market conditions, product life cycle stages, and business objectives. Strategic selection and implementation of these pricing approaches can significantly enhance profitability, competitive positioning, and long-term growth.

References

• Chaston, I. (2020). Small business marketing: Building a foundation for growth. Routledge.
• 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 profitable decision-making. Routledge.
• Porter, M. E. (2008). Competitive advantage: Creating and sustaining superior performance. Free Press.
• McKenna, R. (2021). Pricing strategy: Setting price for profit, growth, and competitive advantage. Business Expert Press.
• Dolnicar, S., & Grün, B. (2019). Market segmentation in tourism: An up-to-date review. Journal of Travel & Tourism Marketing, 36(1), 1-24.
• Kotler, P., & Armstrong, G. (2017). Principles of Marketing (17th ed.). Pearson.
• Tracy, B. (2018). Pricing strategies for small business. Entrepreneur Press.
• Venkatesh, V., & Brown, S. (2018). The analysis of e-commerce strategies and impacts. Journal of Business Research, 102, 162-170.
• Rathmell, J. M. (1956). Business policy and strategy. Richard D. Irwin.