The company target customers to changes in price

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Reference no: EM132166151

What is the company’s pricing objective? For this question

Maximum Current Profit

Many companies try to set a price that will maximize current profits. They estimate the demand and costs associated with alternative prices and choose the price that produces maximum current profit, cash flow, or rate of return on investment. This strategy assumes the firm knows its demand and cost functions; in reality, these are difficult to estimate. In emphasizing current performance, the company may sacrifice long-run performance by ignoring the effects of other marketing variables, competitors’ reactions, and legal restraints on price.

Product-Quality Leadership

A company might aim to be the product-quality leader in the market.33 Many brands strive to be “affordable luxuries”—products or services characterized by high levels of perceived quality, taste, and status with a price just high enough not to be out of consumers’ reach. Brands such as Starbucks, Aveda, Victoria’s Secret, BMW, and Viking have positioned themselves as quality leaders in their categories, combining quality, luxury, and premium prices with an intensely loyal customer base. Grey Goose and Absolut carved out a superpremium niche in the essentially odorless, colorless, and tasteless vodka category through clever on-premise and off-premise marketing that made the brands seem hip and exclusive.

How sensitive are the company’s target customers to changes in price? (I suggest that you give them options on this question such as “highly reactive to price changes,” “moderately sensitive to price changes,” and “low sensitivity to price changes.”)

Moderately sensitive to price changes

Do they have some target segments that are less price sensitive than others?

Yes being that Harley Davidson is a status brand and something people aspire to own, many feel that owning their Harley signifies having made it. And often it is a gift of joining the club and people of the retired and higher incomes are attracted. Higher set income tend to be less price sensitive

How much consideration does the company give to competitors’ prices when setting their own?

Harley Davidson sets the price to be followed by others

What method of pricing do they use to arrive at the final price for the customer? So after listening and paying attention to what J. Smiley had to say and just having dealt with Harley Davidson I think it very safe to say that the method of pricing they use is Percieved Value.

Reference no: EM132166151

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