MKT501 MKT501 Dr Organic Solid Store Rationale & Penetration Pricing Case Study MKT 501
1st Interactive Response: Select one student’s pricing decision post. Is it supported by solid rationale? Would you make a different decision? Dr. Organic is an American local store offering a variety of organic food products that are currently highly demanded by many, especially here in the United States of America. It is important to note that the demand for organic food products have increased rapidly over the years because of human’s increased awareness and desire for better health and safer environment. This has caused the rapid growth of the organic industry which also covers food and non-food products.
Dr. Organic will use a combination of penetration pricing, as a new entrant, and cost plus pricing, to avoid extremely high mark ups. As earlier mentioned, Dr. Organic would be a new player in the industry which means that the company should be able to offer prices lower than the market leaders. This will allow customers to try their product and penetrate the market. This is also in line with the company’s branding that they can provide healthier food options that will not be a burden to the people’s wallets. Additionally, Dr. Organic will use cost plus pricing since goods would be locally sourced from partner farmers and growers. This will help the company compute actual overhead costs and adding a fair mark up (Learn Marketing, n.d.). Penetration pricing and cost plus pricing would complement each other.
In reality, organic food products are more expensive than normal grocery food products. Lowering down the price of organic food products versus market leaders will not only open Dr. Organic to existing customers but also to younger prospect clients who wish to have a healthier lifestyle but cannot afford organic food.
Learn Marketing (n.d.). Marketing Mix: Price and Pricing Strategy. LearnMarketing.Net. Retrieved from http://www.learnmarketing.net/price.htm
2nd Interactive Response: Select another student’s pricing decision post. Is it supported by solid rationale? Would you make a different decision? In Home Care for Everyone is a family owned and operated business located in San Diego, California that provides medical services for everyone in need. We meet with every clients one on one to determine the amount and scope of treatment needed and line that up with one of our certified and friendly medical employees. We routinely follow up with our clients to ensure their needs are being met to their expectations, and if not we can adjust treatment plans and even employees to ensure everyone gets the best treatment in San Diego. Our goal is for every one of our clients to feel as they are being treated like family.
In Home Care For Everyone will be utilizing a cost based pricing and competitive based pricing (Lumen, n.d.). Since they are operating in the health care field their client’s services are covered under Medicare parts A and B (Medicare, n.d.). Since medical insurance is involved IHCFE must be competitive price wise or else the insurance companies will drive their customers to other services but at the same time they must be able to cover the bills and employee salaries which is where the cost based pricing comes in. In order to stay competitive with the other in home care agencies the must find a way to beat their competitors pricing. They could try offering military/senior discounts since those are the target markets, just as long as they don’t reduce their price to the point that they can’t offer competitive salary for their employees. Home health services. (n.d.). Your Medicare Coverage. Medicare. Retrieved from: https://www.medicare.gov/coverage/home-health-services
Pricing Methods. (n.d.). Product and Pricing Strategies. Lumen. Retrieved from: https://courses.lumenlearning.com/boundless-business/chapter/pricing-methods/
FIN 501
3rd Interactive Response
I don’t have any plans for retirement yet. I have no investments in any way, shape or form. I have been learning a lot reading the articles on junk bonds. I think junk bonds are a bit of a scary investment. Troy Segal defines high-yield bonds as debt obligations with a bond rating of Ba or lower according to Moody’s, or BB or lower on the Standard & Poor’s scale. (Segal, 2019). I was very surprised to read that even companies such as Ford have issued junk bonds. When companies start to issue junk bonds, and lose their credit rating, getting loans becomes more expensive for the companies, higher interest rates are issued from the banks. The interest rate is larger because of the additional risks. When reading articles, I found this one to be very helpful in explaining the pros and cons of high-yield (junk) bonds: https://www.thebalance.com/what-are-junk-bonds-pros-cons-ratings-3305606. I think for me, investing in junk bonds is just not an option. I don’t have the money to risk even if it will pay me out more than a regular investment. Its very much gambling, you should only risk what you can afford to lose. Segal, Troy, February 21, 2019. “Are High-Risk Bonds Really Too Risky?: https://www.investopedia.com/articles/bonds/05/junkbondrisk.asp Retrieved April 17, 2019
Each reply should be one paragraph in length (or about 100 words) and must be substantive in nature. Do not simply say “I agree” or “That is great.” Specify why and be detailed in your explanation. You may use research in your responses, but it is not required. Use at least 2 references per response.