ASSIGNMENT

Managing Financial Principles & Techniques

Managing Financial Principles & Techniques

Pricing Strategy

Cost plays a vital role in pricing strategy; pricing is very important financial element. The pricing strategies impinge on featuring products, channel decisions, and promotions. The researcher realizes there is no real determine pricing, following a life cycle for developing the pricing of Services. First, we will develop market strategy which will be evaluated and a marketing analysis will be conducted to identify the market segments, target market, SWOT analysis, and the market positioning. Second, financial decisions we will define the services, contacted manufactures for distribution, and decided promotional tactics. Furthermore, we will focus on the cost productions, price of substitute products, and prices offered by the competition.

Two commonly known pricing strategies are skimming and penetration. Skimming is pricing policy by the producer to sell his product with initially for high price and then at decreasing rate over the time. Price skimming strategies is fundamentally a demand for the offering either by the market as a whole or by segment. High prices can be beneficial for a short period of time when the demand of the product is inflexible. Price skimming strategy is used to target the early adopters of product and service. Early adapters are less price aware since either the needs of the product is less likely than others or they recognize the product value is better. Price skimming can also further market shares, but the seller must use other pricing tactics such an economy or penetration (MERTON 2009 233-249).

Another approach is value pricing. Value pricing is a relatively new concept introduced in the 1990's. However, the term itself has yet to be defined; it is used by hotels, rental car agencies, airlines, supermarkets, and a number of other corporations. The value pricing concept has been rumoured to have originated from the restaurant chain, Taco Bell. Their offerings of low priced food seemingly caused competitive food chains to incorporate and offer value priced items on their menus.

Forecasting Techniques

Forecasting provides the estimation of variable of particular value, forecasting techniques are essential in providing future point. I will define some particular method of forecasting, which will help me in making important decisions regarding revenue and cost, usually forecasting techniques is carried out for providing help in making decision about future planning. Forecasting techniques are essential in modifying behaviour that results in better future position, forecasting techniques I have used for making cost and revenue decisions includes, production planning and inventory control, with the help of this technique I will predict and forecast the product demand, which will enable me to control raw material stocks, moreover this technique will assist me in planning effective production schedule.

Investment policy also helps in making forecasting of financial information regarding exchange rates, interest rates, and share prices (MCDANIE. 1999 Pp. 123-139). This area provides consistency and accurate forecasting financial information for making cost and revenue decision. Economic policy is an external factor which affects the forecasting methods, forecasting technique helps in providing information of economic growth, ...