Question

Question 1 (2 marks)

The “Online” group has developed a series of webinars for student focussing on ‘How to be motivated in the online environment’. Their package delivers 12 x 1 hour per week motivational webinars targeted to students around the world due to the Covid-19 pandemic and the fact that many courses have moved to virtual classrooms. “Online” has asked you to research customer preferences and to recommend a pricing policy. There are limited price differences relating to the timing of webinars in the Northern Hemisphere, however for Southern Hemisphere webinars running a class at or below 45 students (normal class size is 50) costs significantly more for “Online” to run.

Required (200 words):

a. In addition to customer preferences, what information would you like to gather before recommending a pricing policy? Explain why each item you list is relevant.

b. Explain why it is important to understand customer preferences before investing in the infrastructure to run the system.

c. Is the need to consider customer preferences different for this organisation than for another type of organisation? Why or why not?

Also is this cost-based or market-based?

Answer 1

Factors to be considered in addition to customer preference before deciding of pricing

. Costs

First and foremost you need to be financially informed. Before you set your pricing, work out the costs involved with running your business. These include your fixed costs (the expenses that will come in every month regardless of sales) and your direct costs (the expenses you incur by producing and delivering your products and services).

2 Positioning

Once you understand your customer, you need to look at your positioning. Where do you want to be in the marketplace? Do you want to be the most expensive, luxurious, high-end brand in your industry, the cheapest, beat it by 10% brand or somewhere in the middle? Once you have decided, you will start to get an idea of your ideal pricing.

3. Competitors

This is one of the key times you can give yourself permission to do a little competitor snooping. What are they charging for different products and services? What inclusions and level of service are they offering for those prices? What customers are they attracting with their pricing? And how are they positioned in the marketplace? The answers to these questions will give you an industry benchmark for your pricing.

4. Profit

One of the most important questions business owners neglect to ask themselves is, “How much profit do I want to make?” They tend to look at what others charge and then pull a figure out of the air to be competitive without giving consideration to how much profit the want and need.

It is important to understand customer preference because it helps you to know what your customers want from your products and services. Are they driven by the cheapest price or by the value they receive? What part does price play in their purchase decision

Also look at what you are selling, are your current customers buying high-end or low-end products and services? This information will help you determine if your price is right, what level of service or inclusions you should be offering and lastly if you are targeting the right market. It may be that you need to change your market to make your business more profitable.

Answer 3 no the need to consider customer preference applies to every market even in monopoly . As there is a saying customer is the king. So customer choice always remain on top

It is market based