MGT301 Principles of Marketing GDB 2 Idea Solution (June 2010)

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Please use this document only for your information and guidance.

If you are working as a marketing manager in a multinational mobile
manufacturing company and your company wants to introduce a new brand of
mobile. What factors you will consider while setting your pricing strategy?
Discuss any three factors which may affect your price-decision?

Being marketing manager for mobile company, the factors which I will consider for
pricing will be costs, competition and organizational considerations.
Further, 3 factors which may affect my price decision will be as follows:

a) Costs: Costs have to be calculated backwards from the target price which the
consumer is ready to pay for the proposed mobile. Therefore, cost is definitely
a consideration when the product has to be priced to meet the desired target as
we cannot put the target price which cannot cover the costs at minimum.

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b) Competition: Growing number of mobile manufacturers around the world are
posting a threat. Therefore to survive, one has to be competitive both in
pricing as well as in product offered. These days, high priced mobiles are no
longer a privilege for customer.

c) Organizational considerations: Growing competition is now forcing the
company to keep some room open for further negotiations and special
packages that can be offered. For example these days, we may offer mobile
phones with free mobile connections by making liaison with mobile
connection providers. This act will give both of us a new customer. Their cost
for a sim card will be minimum but they will have the revenue generated from
the usage of their connection. We will be able to sell our product with an
additional item i.e. the sim card which if purchased separately will have its
own cost to be borne by consumer.