The Pricing Strategy
The pricing strategyStarting a business in Japan is not difficult if a company can offers its product with high quality and services as good quality product or service offer by companies can assure it penetrate successfully in Japan market. The pricing strategy is one of the vital element which can determine the suscess or failure of IroIro Corporation business expansion in Japan marketPricing setting is used to set the specific price level in order to achieve their pricing objectives. Basically, managers will use several pricing methods to achieve its pricing strategies purpose such as cost-plus pricing, target return pricing, value-based pricing and psychological pricing. Iro-iro corporation are pursues the strategies of penetration price. Penetration price involves pricing the product relatively low compared to similar goods in the hope that it will secure wide market acceptance that will allow the company to raise its price.The objective of quantity maximization by means of a low price. It is most appropriate when demand is expected to be highly elastic. Japanese customers are price sensitive so the quantity demanded will increase significantly as price declines to take more competitive advantage with the normal taste of cake.
Normally, product line pricing strategies also used by Iro-iro corporation to prevents the confusion common in situations where all items are priced individually. It makes the pricing function easier. For example of the daily or normal taste of cake lapis while for the special case as the the cake that request for the custom design, shape, decoration, a premium will be charge more to them because of the usage of the more than one receps and additional work that have to do. Other than that, The method of the discount price ( also known as the list price) for catch the attraction of consumer. Price Discount is the normally quoted price to end users is known as the list price. This price usually is discounted for distribution channel members and some end users. There are several types of discount which are seasonal discount, trade discount and promotional discount. Seasonal discount is based on the time that the purchase is made and designed to reduce seasonal variation in sale. Such discount do not have to be based on time of the year; they also can be based on day of the week or time of the day, such as pricing offered by different menu of weekday and wireless service providers in the shop. Trade discount is a functional discount offered to channel members for performing their roles. For example, Iro-iro corporation offer trade discount to a small retail bakery who may not purchase in quantity but nonetheless performs the important retail function. Promotional discount is a short-term discounted price offered to stimulate sales. For example, iro-iro corporation are promote the “love season” for valentine day for who are purchase the cake are enjoy 10% rebate forward customer.