As a non-profit organization, Love for Indonesia will be selling some merchandises, snacks, hold some fundraising events, and also asking for direct donation to the donators. In selling merchandises and snacks, the organization would need to have the right pricing strategy so that people would be willing to buy the products. In holding the events, such as sport events, the organization would need to make sure that they are charging the right price for the right customers. However, for direct donation, there isn’t any price being set for how much donator can give, although we would have some estimation on how much the organization would expect to spend in helping each specific event. In regards to pricing, there are different strategies that will be discussed: new-product pricing strategies, product mix pricing strategies, price-adjustment strategies, and prices changes.
New-Product Pricing Strategies. Love For Indonesia would be using the market penetrating pricing as its new-product pricing strategy in selling their products, as well as for its fundraising event. Therefore, the organization will be using a cost plus pricing model, setting up a low initial price in order to penetrate the market quickly and deeply—to be able to attract a large number of buyers quickly and win a large market share (Goldhirsh Group, Inc., 1991).
In using this strategy, the organization would need to be able to be highly sensitive in their pricing so that a low price can produce market growth without having to suffer for any loss. The organization would try to sell all the homemade snacks at the lowest price possible, yet still with quality taste. As a non-profit organization, Love For Indonesia has an advantage of not having to pay sales tax, so however much money that the organization gets from selling the products and from the fundraising, all the money could be use to help the poor (Council on Foundation, November 2010). In pricing the fundraising events, for the first events, the organization would charge each player at a cost plus, so that people would want to join and come to the event. Later on, the organization would slowly increase the price as people have come to know and entrusted their money to the organization.
Product Mix Pricing Strategies. Setting up a product’s price often needs to be changed, as products are part of an assortment of products. In this case, the organization is looking for a set of prices that would maximize the profit (Goldhirsh Group, Inc., 1991). Love For Indonesia will be using product line pricing as its main product mix pricing strategy. This strategy uses steps of prices for different product line items. In this case, Love For Indonesia will be selling different kinds of homemade snacks and merchandises. And each snacks and merchandises would be priced differently, depending on the sizes, materials, and ingredients that are used. As for the fundraising event, depending on the kinds of sports, it…