Thursday, March 4, 2010

Cost-based Pricing

Kotler describes cost-based pricing as "setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for its effort and risk."

Staples has started a new ad campaign that showcases their low prices respective to the industry. A customer is shown exclaiming that "wow! that's a low price!" at every item he sees. Then, one employee asks another employee how many products they have, and the reply is over 7000. The employee then goes and gets a cart for the customer. This implies that all of their products are low-priced, and that the customer is going to want to purchase them. They end with the line "Staples has low prices on everything you need for your office, and we mean everything." This explicitly states their low prices on everything that was implied earlier by the commercial. Staples is positioning themselves against their competitors as the "low-price" option for those who care about saving the most money.

Ian Robertson
Section E


  1. It is unclear that this is cost-plus pricing. They may be pinned to competitors' prices, or they may estimate a low perceived value.

  2. Embedded system training: Wiztech Automation Provides Excellent training in embedded system training in Chennai - IEEE Projects - Mechanical projects in Chennai Wiztech provide 100% practical training, Individual focus, Free Accommodation, Placement for top companies. The study also includes standard microcontrollers such as Intel 8051, PIC, AVR, ARM, ARMCotex, Arduino etc.

    Embedded system training in chennai
    Embedded Course training in chennai
    Matlab training in chennai
    Android training in chennai
    LabVIEW training in chennai
    Arduino training in chennai
    Robotics training in chennai
    Oracle training in chennai
    Final year projects in chennai
    Mechanical projects in chennai
    ece projects in chennai