Assignment 8
Assignment 8.2
1. Firms sometimes set a low price in a new product-market (penetration pricing) to discourage potential competitors from entering the market. Can you identify a circumstance where a company might deliberately want to attract competitors to a new market and set a high price to help accomplish such an objective?
Companies that set a higher price in their market to attract competitors usually do to attract a certain profile of customers. Having a higher priced product usually means that they are carrying a more quality or more unique product. Certain buyers will attract to this to set them selves above the norm. Some companies can set their pricing higher because the customer knows that they will be getting the best of the best and knows that quality behind the product. When I think of an example of this, Mercedes automobiles comes to mind. They set themselves apart from their competition with the overall quality of their line of cars and SUVs. They are able to price their vehicle above the competition and are able to attract a market that is willing to purchase their automobiles at a higher price because the customer knows that when they buy a Mercedes they are getting into a higher class of car that is above the mid level automobiles.
2. Read the article: What Small Businesses Can Learn from Southwest Airlines. • Select one small company and provide a brief description The company I am choosing is O’Brien’s Lounge, formally Jameson’s Lounge, the bar I used to own for 2 years. It is a local Irish bar located off 74th n Pacific in Omaha. • Develop a SWOT analysis (four each)
Strengths- • Location- located by major intersection, close to UNO campus, and has many surrounding business. • Longevity- the actual bar, even though it has gone through a couple name changes, has been around for over 20 years • Pricing- drink prices are very affordable compared to the competition •
1. Firms sometimes set a low price in a new product-market (penetration pricing) to discourage potential competitors from entering the market. Can you identify a circumstance where a company might deliberately want to attract competitors to a new market and set a high price to help accomplish such an objective?
Companies that set a higher price in their market to attract competitors usually do to attract a certain profile of customers. Having a higher priced product usually means that they are carrying a more quality or more unique product. Certain buyers will attract to this to set them selves above the norm. Some companies can set their pricing higher because the customer knows that they will be getting the best of the best and knows that quality behind the product. When I think of an example of this, Mercedes automobiles comes to mind. They set themselves apart from their competition with the overall quality of their line of cars and SUVs. They are able to price their vehicle above the competition and are able to attract a market that is willing to purchase their automobiles at a higher price because the customer knows that when they buy a Mercedes they are getting into a higher class of car that is above the mid level automobiles.
2. Read the article: What Small Businesses Can Learn from Southwest Airlines. • Select one small company and provide a brief description The company I am choosing is O’Brien’s Lounge, formally Jameson’s Lounge, the bar I used to own for 2 years. It is a local Irish bar located off 74th n Pacific in Omaha. • Develop a SWOT analysis (four each)
Strengths- • Location- located by major intersection, close to UNO campus, and has many surrounding business. • Longevity- the actual bar, even though it has gone through a couple name changes, has been around for over 20 years • Pricing- drink prices are very affordable compared to the competition •