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Q: Why do so many manufactures use cost-plus pricing?
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Types of pricing?

There are various pricing options available including retail, promotional and discount pricing. Businesses use various strategies to attract customers on a regular basis.


Does General Electric use cost based or value based pricing approach?

value-based pricing approach


What is Market Penetration Pricing?

Market penetration pricing is a pricing strategy that many companies use to enter a competitive market. Market penetration pricing is usually very low and coupled with consumer incentives to gather market share. This method if done on a massive scale can cause falling costs industry wide thus allowing further penetration by further allowing the reduction of introductory prices.


Why are marketing channel decisions as important as pricing and product feature decisions?

If you don't use the right marketing channel, you may miss your target market and your marketing program may fail. Having the right pricing and product features displayed in marketing materials, but using the wrong channel to deliver the marketing message will most likely result in failure. For example, if you are selling cutting tools to an industrial market, but try to use a Pinterest group that shares baking recipes, you probably won't sell very many cutting tools. Know your customers and what channels they use.


What is the difference between price strategy and price tactics?

A price strategy defines the initial price and gives direction for price movements over the product life cycle. The price policy is a strategy set for a specific market segment, based on a well-defined positioning strategy. Price tactics used to fine-tune a base price are the following: discounts (such as cash, quantity, and functional or seasonal discounts); allowances (such as promotional allowances); and rebates. All three are ways to induce buyers to do something they might otherwise not do. Geographic pricing tactics (such as FOB origin, uniform delivered, zone, freight absorption, and basing-point pricing) all moderate the impact of shipping charges as a portion of the product price. Special pricing tactics (such as single-price tactics, flexible pricing, price lining, professional services pricing, leader pricing, odd-even pricing, bait pricing, price bundling, and two-part pricing) can be used for a variety of reasons. For example, a business might decide to introduce a new product at a high skimming price, but use some price tactics such as rebates or freight absorption to induce trial.

Related questions

Why do many firms use cost plus pricing for supply contracts?

They are guaranteed a profit.


How do you compete against Chinese manufacturing?

Chinese manufactures are one of the best manufactures in the world.But it doesn't mean hat we cannot compete against them. They ar successful because they use strategies that are really unique.within the business and also outside the business and they have a higher level of technology plus a greater workforce who are willing to work at a low wage. The only way to compete them is to use strategies like low pricing strategy,use a flexible and motivated and skilled workforce.


Why we dont use turbocharger in petrol engine?

Your question assumes something that is not true. Many auto manufactures do use turbo chargers on petrol engines.


What are 2 ways car manufactures are using to reduce air pollution?

Most manufactures do it. They use catalic converters.


Types of pricing?

There are various pricing options available including retail, promotional and discount pricing. Businesses use various strategies to attract customers on a regular basis.


Does General Electric use cost based or value based pricing approach?

value-based pricing approach


What place have coupons / discounted pricing on oil changes?

S.w.a.g.bucks has many coupons that you could possibly use. But a business that doesn't use coupons but is alternatively cheap with discounted pricing on oil change is Sears because it is so commonly known that it is meant to be financially accessible.


What is penetration pricing strategy?

Penetration pricing strategy is an approach in business many companies use when they want to gain more customers in a particular market. Typically, businesses will reduce their prices in order to attract more customers.


How can you calculate a current stock pricing?

use a calculator!


How can you use the word pricing in a sentence?

"This pricing is so unreasonable." Hikuri sighed. "We'll have to come back when we get some coupons."


Name something that the company Carmichael manufactures for use in the home?

There are thousands of products manufactured for home use. Diana Carmichael Artworks manufactures jewelery, as well as pewter tableware and accessories.


What is cost plus and what kind of companies use this?

Cost plus is pricing method that many companies use to price their product . This method allows for the price the company pays and what they will have to sell it for to make a profit.This is use in many of the service industry.