Pricing Strategies Making Products Inelastic - 1738 Words

Introduction A fairly recent concept about making the consumer perceive the product as being â€Å"best for you† has now become the key force for obtaining long-term profits among, among various low-calorie microwaveable food companies. This new strategy has not only benefited the food industry as a whole but has also spurred a lot of interest in the public as well. In order to ensure that the organization continues to perform effectively, it is highly essential to develop a long-term plan and make some long-term capital budgeting decisions that would impact the company in the near future. Pricing Strategies: Making Products Inelastic: The overall pricing strategy of any company depends upon the type of demand that is being made by the†¦show more content†¦In simple words, the customer chooses to buy the product regardless of the changes made in the prices of that product by the company. The low-calorie microwaveable food company wants to keep the prices of its product as inelastic as possible to make sure that the changes in the prices do not impact the consumer’s purchasing behavior. When it comes to microwaveable food companies, there is a lot of competition. Therefore, it is essential that an effective pricing strategy is adopted: 1. Product Differentiation 2. Branding 3. Persuasive Advertising The first and foremost strategy that the firm should adopt is that of Product Differentiation. The company should invest money on the RD efforts to differentiate their product and set it apart from those being offered by their competitors. The basic purpose of this marketing strategy would therefore be to identify and portray the differences within the product that is being offered to the customers. This technique could be used to specifically compare and contrast the various qualities of the product with similar products of other companies. Branding is another strategy that would allow the low-calorie food companies to make their products more inelastic. Consumers tend to get attracted to branded products. Branding the product would automatically influence the minds of the customers and become a foundational piece