Managerial Economics
Pricing Strategies
Abstract
In this term paper I will be discussing the managerial economics art of pricing good and services. For the most part I will concentrate on goods, because that is what interests me, and as for now I don’t really have any knowledge of services that I could provide in the market for a profit. I have done research about Wal-Mart and their strategies on pricing and always being able to guarantee the lowest prices. I will look at how they are able to do this and as we all know stay very successful. Another topic that I will cover in this paper is also something that interests me very much and could be very useful for entrepreneurial minds, and that is the art of pricing product on E-bay. In addition to those two topics I will also be looking at some strategies and analysis that really could be used in any market, when on is trying to figure out the best way to price a product. And at last I will conclude this paper and cover the main factors of each topic that I will be covering in this paper.
Pricing Strategies
Pricing a product is very crucial in any business and there is thin line of doing it right and setting the right price. If done incorrectly one can easily be out of business within seconds. That is why it is very important to know how to do it correctly, because it could be the difference between succeeding and failing. The key factors that determine this thin line are very basic and really logical if one puts them self’s into the consumers shoes. Price a product or service to high and there will be a low chance of selling it. Price it to low, and one will not be able to pay for what it takes to be in business, things such as overhead, employees, taxes, and operation costs just to name a few. One really must find the right balance in order to succeed in a competitive market. Of course every business, every product and every service needs to be assessed properly. For an example this means...