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Module 6 Discussion 7

Module 6 Discussion 7

Q Discussion 12: Pricing Directions: One original post (approx. 250 words with supporting references using APA and two peer replies approximately 150 words. By pressing "reply" and posting you are attesting that the posts are in your own words. Pricing Strategies to Accomplish Pricing Objectives IPOD and Kindle Fire at introduction used two very different pricing models. IPOD used a price skimming approach and Kindle used a penetration pricing approach. Discuss the relative effectiveness of each approach to pricing as it relates to the overall strategy of the firm. Has the strategy been successful for each firm? Cite details. https://www.youtube.com/watch?v=gPAGip9GOIU&t=36s Pricing: Art or Science? Pricing is sometimes considered an art and at other times a science. Discuss the differences between approaching pricing as art vs a science. Give an example of firms using each approach. Is the approach working for that firm and why? http://www.mktgsensei.com/AMAE/Pricing/Art%20and%20Science%20of%20Pricing.pdf Please note: graded discussions in this course are "Must Post First": After you have posted your response - you then get the benefit of seeing what your fellow students answered while going through the same discussion exercise. Then you can provide feedback comments.

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Price skimming is a concept used to target customers that are interested in their product. This particular strategy sets prices high in the beginning and maximize short term profits. Over time the price will reduce to attract new customers. On the other hand, penetration pricing is the strategy that set prices low to attract new customers and to also increase the product's market share. This method tends to have an effect that increase customer loyalty. Over time, once proven, the price will increase as the demand rises. Although penetration pricing's profit is lower short term, early sales being so high compensates for the small margins.