Pricing at The Farmer’s Market Essay Example

  • Category:
  • Document type:
  • Level:
  • Page:
  • Words:

Farmer’s scenario

How urban farmz might use a combination of cost-based, demand-based and competition based pricing for the products it sells in pursuit of profit.

Starting with cost-based pricing, Urban farms can set a reasonable price for its products considering two main factors. One factor is the capability of the potential customers to purchase their product. Urban farms need to set their cost in a way that its potential customers are in a position to buy their product. Not too high for the customers but at the same time, making sure that it is going enough and the reasonable profit for itself (Chan, 2013). The other factor is the cost of production. The farm needs to look at the cost of production before setting the value. The farm should then configure the value of its product at a higher price than the production cost. This will ensure that the farm makes a profit.Basing the argument regarding demand, it seems that Urban Farm’s products are highly demanded by customers. The farm should take this as an advantage by slightly increasing the cost of their product. This increase will enable them to make more profit for themselves because it won’t have a huge negative impact on their sales since the demand is quite high and impressive. Looking at the area of competition, the farm ought to consider the cost of similar products offered by other entrepreneurs. For market purposes, it ought to set the value of its products slightly lower than that of its customers as it is evident from the scenario that the clients go online to look at how the various prices range from each other. This should be done bearing in mind that one of the primary purposes of any business venture is profit. Therefore, the prices should not be too low such that they adversely affect the benefits. Combining this factors as explained above, urban farms would be enjoying a good profit.

The perception consumers will have for the different prices of the bar soap sold by public Farmz and that sold by the soap maker and the recommendations regarding this price difference.

Because Urban Farmz products are diversified by being organic certified, customers will most probably see the product as of a higher quality than that of the soap maker. This will make them accept the fact that Urban Farmz products should be slightly costly than that of the soap maker. Having the same price would, in fact, confuse the consumer. This means that the thoughts of Caleb are correct and to the point. Adding a $ to the cost of the bar soap will be of great advantage to Urban Farmz since they will be making much more profit.In this case, it’s recommendable for Urban Farmz to have their prices slightly higher than those of the original soap manufacturer. However, while setting this prices, the farm ought to be very keen not to set its prices too high. Setting the prices to be too high will not only be an added advantage to its competitors but also a loss of their client’s trust. This is because its natural for a person to tend to save some cents for himself when purchasing a product in regardless of the quality of whatever he is buying. No one would like buy a product at a very high price knowing that he can get a similar product at a lower and much reasonable price (Anthony, 2005).

Whether it’s recommendable for Urban Farmz to use promotional pricing at the farmer’s markets and the techniques which they can use.

It’s quite recommendable for Urban Farmz to practice promotional pricing at the farmer’s market. This will help them grow their serial client base and enable them to have a greater market command than their competitors. To do this, the Farm can apply some techniques. To start with, the Farm can use the method of special events pricing. This involves giving discounts to customers during certain days especially during the holidays. When the potential customer gets these products during the holiday, he can see the benefits of the product and gets convinced that the product is of the quality he wants. This will make the person become a great loyal customer in the future. The technique of longer payment terms is also another suitable method which Urban Farmz can apply to promote their products. This involves giving customers suitable payment terms. Telling your loyal customers that they can purchase the products on fair deals. By doing so, the customer gets some products and excellent services at flexible payment method. This will go a long way in ensuring that Urban Farms continue growing their customer base. Low-interest financing is also another strategy which Urban Farms can use to promote their products. This involves the selling of products to customers at low and fair interest rates. It greatly helps in increasing the customer trust on a company. Another good and working promotional pricing technique which Urban Farms can use in promoting its products is through giving of warranties to its customers. This boosts the customer’s trust on a particular product and consequently his purchase of that particular product (Ferrell, 2010). When Urban Farmz practices this promotional pricing practices, it will greatly develop its client base and consequently become one of the leading companies.

Works cited

Anthony. J. How to Develop Professional Selling Skills & Techniques Based on Common on sense & ethics. Trafford Publishing: Victoria, Canada 2005 print.

Ferrell. O, & Michael. H. Marketing strategy. Cengage Learning 2010 print.

Chan. K, & Renee. M. Blue Ocean strategy: how to create many market space and make the competition irrelevant. Harvard business review press 2013 print.

Tapan, K. Marketing Management: Texts and Cases Indian context. Excel Books India. 2009 print.