Top Class People can also be price sensitive Price Sensitive Price Sensitivity, also known and calculated by Price Elasticity of Demand, is a measure of change (in percentage term) in the demand of the product or service compared to the changes in the price.Competition: These strategies can create a problem for industries having tough competition, and competitors are very competitive in creating substitutes in a limited time to capture the market.Hence companies have to spend high on marketing. And they charge a very high amount of advertising. Hence, they appoint people with high social status to advertise their products. High Spends on Marketing: The companies target top-class executives and people of the high class.Limited Customer Base: Here, the manufacturer focuses on quality instead of quantity and targets only people with high financial positions or belonging to the top class like celebrities, etc. Lower chances of defects in the product.It is determined by subtracting the fair value of the company's net identifiable assets from the total purchase price. Increased goodwill Goodwill In accounting, goodwill is an intangible asset that is generated when one company purchases another company for a price that is greater than the sum of the company's net identifiable assets at the time of acquisition.Hence, they focus on the uniqueness of the product to stand out from the rest of the crowd. Unique Products: Prestige pricing is possible only for products with no close substitute.The primary motive behind superior quality is customer satisfaction and improved faith, which automatically increases the brand value. Improves Brand Value: : It is kept for branded goods with no close substitute, and it focuses on quality rather than price and quantity.It is determined as the ratio of Generated Profit Amount to the Generated Revenue Amount. Hence this gives them more profit margins Profit Margins Profit Margin is a metric that the management, financial analysts, & investors use to measure the profitability of a business relative to its sales. Therefore they keep the price of products high compared to other products in the industry. Hence keeping the price reasonable is not the basic need of manufacturer companies. High-Profit margins: It gives the pricing benefit in the industry as it targets the people with class and having the top financial position.
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