mkt402 week 1 discussion 1 and response

“Pricing Strategies” Please respond to the following:

  • Identify one product that would benefit from each of these three pricing strategies, and one product that would not benefit from each pricing strategy (cost-plus, customer-driven, and share-driven). State your rationale for each selection.




RE: Week 1 Discussion 1


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Cost-plus pricing: A product that could benefit from Cost plus pricing is moderately-priced hosiery. A brand like Hue can carry the impression of having a fair return over all costs, or financial carefulness. In difference, a hosiery brand like Donna Karen already speaks like a brand that caters to luxury. This would not be a good for mediocre financial performance.

Customer-driven pricing: Hue, being in the hands of sales or product managers, could benefit from customer-driven pricing based on demand. However, the surge in pricing could solidify brand loyalty through appeal. In the case of Donna Karen hosiery, customer- driven pricing may cause it to fail because consumers would want to get their hands on a more exclusive product. This would undermine the perceived value and depress future profitability.

Share-driven pricing: In this pricing, it was a little difficult for me to think of a benefit using this pricing tool. With the exception of marketing efforts to display shares, there isn’t much of a reason to use market shares as an end goal. If I had to choose a benefit for Hue, it would be that share-driven pricing has a longer-term effect on cost than customer-driven pricing. While cost-plus thinks “short-term”, share-drive thinks “long-term”. With Donna Karen, the name is enough to keep brand loyalty and shares intact. Therefore, there is no benefit for the hosiery brand to use share-driven pricing.

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