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Applied Managerial Marketing

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Submitted By pvweeks76
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PHASE 4: Individual Assignment

Phyllisia Weeks

June 16, 2015

MKTG 630-1502b-02: Applied Managerial Marketing
Colorado Technical University

The two pricing strategies that M&M need to take in consideration are Penetration Pricing and skimming strategy. Our book for this class outlines four strategies that are essentially used in the business, which are skimming, economy, penetration, and premium pricing strategies (Definition of Pricing, 2015). Organizations may diversify the four mentioned strategies, or may include even more strategies that are found through researching, such as the high and low strategy, marginal cost pricing, and market oriented pricing. Price may maximize revenue and profits, or may backup existing market from new competitors (Definition of Pricing, 2015). However, for this assignment I’ve chosen the before mentioned strategies, penetration & skimming as I’ve compared and analyzed M&M’s benefits in comparison to the cost associated with gaining them.

Penetration pricing is set preciously short in order to gain market share swiftly. After a new service is launched, there is an understanding that prices increase after the period of promotion and also after there are achievements of market share objectives (Definition of Pricing, 2015). With penetration pricing, there is a goal of customers’ attraction from setting prices low.

Skimming strategy’s idea is to recuperate maximum money upon services attract more competition that will decrease profits for the organization (Applied Managerial). Skimming is basically having a price set high for products until competitors permit, hereafter will allow for lower prices. Organizations are in a good position to recover the maximum amount of money prior to competitors getting in on the business as competitors entering the market will decrease the amount of profit.

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