Pricing And Distribution Of Pricing - 1357 Words

FUT pricing has attractive properties compared to usage-based pricing; it reduces utility variance by bundling plan units, and thus it satisfies diverse consumer needs and could thus enhance firm profits. FUT pricing also has a key advantage over flat rate pricing; by having more than one price point, FUT pricing makes it efficient and flexible to accommodate heterogeneous consumer needs, making it possible to increase total social welfare (combination of firm profit and consumer surplus). However, since FUT menu pricing is generally more difficult than flat rate pricing to implement in practice, it is useful to understand â€Å"when† and â€Å"by how much† FUT pricing can perform better compared to flat rate pricing in terms of firm’s profits, consumer surplus, and social welfare. Therefore, we aim at deriving an optimal solution for FUT menu pricing to both extend the literature on the pricing of information services and also to enhance managerial practice by t esting our model with sophisticated analytical and empirical techniques. FUT menu pricing resembles traditional quantity discounts for physical goods (e.g., Monahan, 1984; Lee and Rosenblatt, 1986; Munson and Rosenblatt, 1998; Corbett and Groote, 2000; Shin and Benton, 2004) in the sense that the unit price for a bigger size plan is discounted. However, unlike its popularity for information services, flat rate pricing is not as popular for physical goods perhaps because of the positive marginal cost associated with each unitShow MoreRelatedPricing and Distribution1937 Words   |  8 PagesPricing is one of the most important elements of the marketing mix as it is the only mix, which generates a turnover for the organization; the remaining 3ps are the variable cost for the organization. It costs to produce and design a product; it costs to distribute a product and costs to promote it. Price must support these elements of the mix. Pricing is difficult and must reflect supply and demand relationship (Constantinides, 2006). Pricing a product too high or too low could mean a loss of salesRead MoreBranding Pricing and Distribution1395 Words   |  6 PagesBranding Pricing and Distribution Presented to Presented by May 20, 2012 Abstract The company chosen and used for this paper is a mobile transport company that caters specifically to senior citizens. This particular paper will explain in detail domestic and global product branding strategy, optimum pricing strategy and a distribution channel analysis that identifies the wholesaler, distributor, and retailer relationships including e-Commerce. Discussions within the paper will also includeRead MoreBranding, Pricing, and Distribution1528 Words   |  7 PagesBranding, Pricing, and Distribution Gary D. 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Pricing is an important strategic issue because it is related to product positioning and furthermore, pricing affects other marketing mix elements such as product features