In some industries prices are set low, subsidies are provided, and other price-reducing mechanisms are used to establish a long-term relationship with the buyer. Utilities, for example, sometimes use incentives to encourage contractors to install electric- or gas-powered appliances. Manufacturers may price equipment low, then depend on service and parts for profit contribution. What are the advantages and limitations of this pricing strategy?
Answer to relevant QuestionsDiscuss why it is important to consider pricing from a strategic rather than a tactical perspective. Discuss how Godiva Chocolatier’s website (www.godiva.com) corresponds to the brand image portrayed by its retail stores. What are the promotion objectives that Godiva’s management seems to be pursuing on the website? Discuss the advantages and limitations of using awareness as an advertising objective. When may this objective be appropriate? Visit Nokia’s U.S. website (www.nokiausa.com). Evaluate Nokia’s sales approach online. How does Nokia enhance its direct marketing strategy through Web-based offerings? How could the company increase traffic to its ...Is incentive compensation more important for salespeople than for product managers? Why?
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