Question

Hi I really need help with this assignment. I am not sure how to start it may you please help me? This is for business.

Most calculators come with a book of instructions. Unfortunately, if you misplace the book, you’re left to your own devices in figuring out how to use the calculator. Wouldn’t it be easier if the calculator had a built-in “help” function similar to the one on your computer? You could just punch the “Help” key on your keypad and call up the relevant instructions on your display screen. You just invented a calculator with this feature, and you’re ready to roll it out. First, however, you have to make some pricing decisions:

When you introduce the product, should you use skimming or penetration pricing?
Which of the following pricing methods should you use in the long term: cost-based pricing, demand-based pricing, target costing, or prestige pricing?

Prepare a report describing both your introductory and your long-term alternatives. Then explain and justify your choice of the methods that you’ll use.

Answer 1

SMART CALCULATOR

Calculator is something used for making mathematical calculations, a device that performs arithmetic operations on numbers.It ease the hectic task of human beings. It has become more advanced in 1970s, and the advanced version called scientific calculator was also introduced, but for some reason there was no new technology adopted in calculators. Here i am going to introduce a calculator with a smart function..A smart calculator with a smart function.

A calculator with a "Help" function

This function will help the user's task even more easier by giving tips and tricks to find out the solution to every calculations.The help function works like the way how it works in computers.This will ease the task not only for the students but for the teachers,employees etc.

Now lets discuss about the pricing strategy of this Smart calculator.

With the two introductory pricing methods i am going to adopt PENETRATING PRICING..

Penetrating pricing is a pricing strategy where the price of a product is initially set low to rapidly reach a wide fraction of the market and initiate word of mouth. I recommend this pricing strategy for the smart calculator

Reasons for opting this pricing strategy is:

Calculators have a few brands which are completely dominated in the industry so it becomes a cut throat competition for the new brand to get its place in the market even though it has a unique function,getting customers confidence and trust is not an easy task.

Calculators are mostly used by students than any others so this will not be allowed inside the examination hall as it has a help function in it..so just because of that the parents and teachers do not prefer this to students for a long term use as they start escaping from solving it by their own.

Market capturing is not an easy task once it has got a market share the price can be or cannot be slowly increased as it has so many advantages to employees and teachers.

Discussing about the long term pricing method

I strongly recommend DEMAND PRICING METHOD  to my smart calculator

It is the pricing done based on the customers demand and the perceived value of the product.price penetration is one of the demand pricing method.

The success of the smart calculator completely depends upon the response from the customers as i have already specified that few brands have completely dominated the industry and customers blindly believe only them..

If the demand increases the price gradually can be increased..The customer have to accept the new brand and they have to enjoy the new function as well. The customers have to accept the "Help" function positively like how it worked in computers.