Discussion question answers: First posts are due on Wednesday of each unit or 5 points will be deducted. There is a minimum word count of 100. Responses: Please respond to the question(s) AND respond to at least one other classmate’s posting. Your answer(s) should be no less than 1 paragraph per question. All responses are due on Sunday of each unit. Questions What is the difference between a penetration pricing strategy and a skimming pricing strategy? Under what circumstances would each be used? Discuss some recommendations for designing an effective website.

Penetration pricing strategy and a skimming pricing strategy

The penetration pricing takes place when a firm establishes a lower commodity price which the aim of gaining a share of the market. For instance, a manufacturing company like sponge might adopt this strategy of penetration pricing to get customers from other competitors and also to demoralize other competitors from entering the industry. If this firm maintains low prices customers will come to buy their new product (Moses, 2012). The competitors who are not in a position to promote or to produce sponges to get such navigable profit will be forced to leave the market, giving the sponge firm the freedom to maximize the goodwill and recognition of their brand. This strategy can be used when the firm requires an exceptionally low price in order to lure customers as well as to drive away or scare other competitors.

On the other hand, price skimming concentrates on profit maximization by raising the price in initial adopters of a new commodity then reducing the price to lure more customers. For instance, a mobile phone firm may invent a new commodity with initial price being high with the intention of counting on some customers’ ability to pay some amount for new technology, then when competitor’s sales go down the firm reduces its price progressively. This strategy is applicable when your firm and commodities have a prestige quality (Moses, 2012). This is because consumers in most cases are not going to purchase premium prices for either unknown or generic name of the brand. Therefore, if your firm is known to be famous in this then skimming pricing is the best strategy. The expenses to promote the commodity you are selling requires quick recouping (Lu, & Comanor, 2008). Due to the fact that this strategy involves raising product price, the R&D costs need quick recouping.

 

Designing website

An effective web design should adopt non-frame pages with both navigation graphics bars together with some rollover effects. Moreover, it is advisable for every single page to have navigation text-only bar for the purpose of easy control (Katerattanakul, 2012). Furthermore, the inventor should adopt a style of cascading sheet in order to curb both the font size and the font and apply thy style sheet to the entire sheet in order to get the frequent feel and look.

 

References

Moses, O. D. (2012). Organizational slack and risk-taking behavior: tests of product pricing

Strategy. Journal of Organizational Change Management, 5(3), 38-54.

Lu, Z. J., & Comanor, W. S. (2008). Strategic pricing of new pharmaceuticals. Review of

Economics and statistics, 80(1), 108-118.

Katerattanakul, P. (2012). The framework of effective web site design for business-to-consumer

Internet commerce. INFOR: Information Systems and Operational Research, 40(1), 57-

70.