Pricing policies and research essay
In the contemporary business environment, pricing policies and research and development play crucial part in the successful business development. Many companies face considerable problems with their business development because of the poor pricing policy and ineffective research and development. In this regard, the example of Clipboard Tablet Co. reveals the full extent to which the pricing policy of the company may be ineffective, while attempts to the company to save costs on research and development can aggravate the position of the company in the market, putting the company in a disadvantageous position compared to its major rivals. In such a situation, the company apparently needed a different pricing policy and the company should pay more attention to the research and development. In this regard, the change of the pricing policy and substantial investments in the research and development could have become strong drivers that could accelerate the business development of Clipboard Tablet Co. in the course of 2012-2016, while the company should match interests and needs of its customers due to flexible pricing policy and introduction of innovations due to the fast and effective research and development.
Pricing policies of Clipboad Tablet Co.
In actuality, the pricing policy conducted by Clipboard Tablet Co. has proved to be ineffective because the company has deteriorated its marketing performance consistently, while the price set by the company made its products and services unavailable and unaffordable for a large part of its target customer group. Therefore, the company apparently deteriorated its marketing position because of the ineffective pricing policy conducted by its top managers (Breneman & Taylor, 1996). The company had to focus on the elaboration of a different, more effective pricing policy that could match the marketing strategy and objectives the company wanted to reach in the nearest future. Instead, the pricing policy conducted by the company made strategic goals of the company virtually unattainable.
As the pricing policy conducted by the CEO of the company has turned out to be ineffective, the company should better develop a flexible pricing policy which is much more effective compared to the pricing policy conducted by the company. In fact, the flexible pricing policy makes the company more tolerant to customer’s needs and buying power (Blanchard & Bowles, 1993). The flexible pricing policy matches the buying power of customers as the price of products and services offered by Clipboard Tablet Co. can vary depending on the buying power of customers and the current situation in the market. The business environment of Clipboard Tablet Co. is vulnerable to consistent changes and the company cannot conduct rigid pricing policies because such policy makes the price of its products and services irrelevant to the current business environment and the position of customers. For instance, the company sets the high price, which customers can pay at the moment. However, the ongoing deterioration of the economic situation forces customers to start saving that will the current price of Clipboard Tablet Co.’s products and services unavailable for them.
Instead, the flexible pricing policy could accelerate the business development of the company because the flexible pricing policy allows the company to modify the price respectively to changes in the business environment and customer behavior and buying power. In fact, the flexible pricing policy takes into consideration changes in the business environment. Business environment is vulnerable to changes and the company should be able to respond to these changes fast. In this regard, the flexible pricing policy is very effective and can bring considerable benefits to the company because the company can change prices in accordance to the current situation in the market. For instance, if price in the market start rising, the company can track and raise its prices too and, on the contrary, if prices drop, the company can decrease its prices too.
Furthermore, discount programs for loyal customers comprise an integral part of the flexible pricing policy of the company. In fact, the company can increase the customer loyalty offering them discounts. For instance, the longer customers use products and services of the company the larger discounts the company can offer in terms of its loyalty program (Lim, 2006). Thus, customers will be interested in using products and services of the company and they will buy them over and over again. In such a situation, potential losses from discount programs still cannot outweigh benefits of the loyalty of customers and the growing sale rate of the company (Benfari, 1999). The company can benefit from the loyalty of customers, who buy products and services of the company regularly and, more important, they can attract other customers to Clipboard Tablet Co.’s products and services. For instance, loyal customers can share their positive impression of the company’s products and services as well as prices. As they spread positive information of the company, their friends, family members and other people they communicate with also develop a positive view of the company and use its products and services on the regular basis. The price may be crucial for these new customers because they naturally prefer affordable price, which are more attractive for them than prices of Clipboard Tablet Co.’s competitors.
However, the company can hardly avoid rising prices of its products and services. Hence, the pricing policy should change and provide the steady rise of prices but prices should not exceed those of competitors. The company should offer competitive and affordable prices. Loyal customers will stick to the company’s products and services because they are comparable to those of its major rivals, while new customers can be attracted by the affordability of the prices set by Clipboard Tablet Co.
In the course of 2012-2016, the company should rise the price of its products and services by 5% at the most, but not least than 3%. Therefore, the average growth of prices of the company will be 0,5-1%. Clipboard Tablet Co. should take into consideration the current inflation rate, the buying power of customers and the average level of prices of similar products and services in the industry to be able to offer customers affordable and competitive prices. The flexible pricing strategy can improve the position of the company consistently, attract new customers and expand the market share of the company.
Research and development of Clipboard Tablet Co.
In the contemporary business environment, the research and development are keys for the marketing success of Clipboard Tablet Co. In fact, the company has to focus on the research and development as the strategic direction in its business development. Under the previous CEO, the company has failed to enhance its research and development. In stark contrast, the former CEO of the company has cut spending on the research and development substantially. As a result, the number of innovations introduced by the company has dropped substantially, while the quality of innovations was extremely low. The low quality of innovations is absolutely unacceptable in the contemporary business environment because they put the company in a disadvantageous position in the market. Moreover, the company has started to suffer from technological backwardness as rivals of Clipboard Tablet Co. introduced new technologies and innovations. As a result, the company has started to lose its customers, their loyalty and satisfaction dropped that naturally led to the deterioration of the competitive position of Clipboard Tablet Co. in the market.
Therefore, Clipboard Tablet Co. should focus on the research and development as the strategic direction in its business development. The company should be aware of the great potential of the research and development in a long-run perspective. Even though the company probably attempted to save costs in a short-run through cuts of spending on the research and development, such savings would have disastrous effects on the competitive position of the company in a long-run perspective. Instead, substantial investments in the research and development can enhance the position of Clipboard Tablet Co. in the market in a long-run.
The research and development of the company should include environmental inputs, including leadership, strategy and culture. The leadership is crucial for the research and development because the leader of the company should encourage subordinates to introduce innovations, which are the result of the research and development. The strategy is also extremely important for the research and development because the research and development comprise an integral part of business strategy of the company. The integration of the research and development in the marketing and business strategy allows the company to develop effective business strategies and successful implementation of the business development of the company. The culture of the company should also integrate the research and development to facilitate the business development of the company. Employees working in the company should view the research and development as an integral part of their work that will encourage the introduction of innovations and innovative activities that can accelerate the business development of the company.
The organizational capability and execution should focus on the research and development. The introduction of new technologies, products and services can help the company to take the leading position in the market. The research and development include the introduction of innovations by the company, including the introduction of new products and services. Therefore, the company can take the lead due to innovations. As the company introduces a new product or service, the innovation attracts customers, while rivals of the company do not have this product or service to offer to customers. Hence, the company can enjoy taking the leading position offering the innovative product or service.
The company should encourage employees, who introduce innovations. Employees should be interested in the research and development (Falletta, 2005). In this regard, the use of financial motivation of employees may be an effective tool that encourages them to work on research and development and to suggest and introduce innovations that can improve the marketing performance of the company.
To cover the research and development spending, the company should increase funding of research and development programs. The research and development of an innovation may be costly. Therefore, the company should invest considerable fund in the research and development. To increase the effectiveness of innovations and to save funds, Clipboard Tablet Co. should focus on the most prospective projects and fund them. Focusing on the most prospective projects helps the company to gain high return on investments and minimize risks of the development of innovative projects.
The performance outputs will include the improvement of the organizational performance. At any rate the company can enhance its marketing position, if it conducts flexible pricing policy and invests in research and development.
Conclusion
Thus, taking into account all above mentioned, it is important to place emphasis on the fact that Clipboard Tablet Co. should introduce flexible pricing policies that will allow the company to match its prices and the current situation in the market. The flexible pricing policy will meet customers’ needs and buying power. In addition, the company should invest into the research and development because innovations can put the company in an advantageous competitive position in the market.
