1)Price strategy is the method of companies use to price their product or services. The first internal factors that will affect Air Asia’s price strategy are the overall marketing strategy, objectives and mix that the company use. When the company already selected its target market and positioning, then the price can set fairly straightforward. For example Air Asia’s company target the market that the people who want to flight but can’t afford the expensive flight cost, so their flight ticket will be setting at low price. The next factors are the organizational considerations. The company need to decide who within the organization should set the price. Normally the small company price set by the top management. But for Air Asia, they often have a pricing department to set the best prices. Now we will talk about the external factors that affect Air Asia in price strategy. The first one is the market and demand. As we know that Air Asia Company is in the oligopoly market structure, in oligopoly the firm in this market is alert and responsive to competitors’ pricing and moves. The next is the price elasticity of demand; the flight ticket is price elasticity product. So if the price decreases, the demand will increase many. The last and the most important factors is the Economy factors. The happened of inflation, recession will affect the consumer spending and their perceptions of the price. For Air Asia, they set the price very low, so the people will consume it rather than their competitors.
2) The first product pricing strategies is the Market penetration pricing. It is the strategies that company set a low price for the new product to attract a large numbers of buyers and the large market share. For example, Air Asia Company set the low price of the flight ticket to capture a large market share in flight market. The next product pricing strategies that Air Asia use is by-product pricing. It is the strategies that setting the price for the main product more...
Please join StudyMode to read the full document