MNC: Right price vs. fair price. Take a position and explain it.
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You are a executive for a large multi-national corporation, meeting with general managers.
Prices are often set to satisfy demand or to reflect the premium that consumers are willing to pay for a product or service. Some critics shudder, however, at the thought of $2 bottles of water, $150 running shoes, and $500 concert tickets.
TAKE A POSITION:
Prices should reflect the value that consumers are willing to pay.
vs.
Prices should primarily just reflect the cost involved in making a product or service.
Explain your position.
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Solution Summary
The 443 word solution offers reasons for cost based pricing.
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Prices should primarily just reflect the cost involved in making a product or service.
Why we support primarily cost based pricing is that
It is:
1. easy to calculate
2. minimal information requirements
3. easy to administer
4. tends to stabilize markets - insulated from demand variations and competitive factors
5. ethical advantages
That apart:
v Law in several countries does not allow monopolistic pricing.
v Loss leader is punishable in several countries.
v Several countries impose restrictions on the prices that can be charged for selected essential items like food, medicine and education.
v Taxes are levied by several ...
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