Essay on To what extent will a price discrimination strategy for every product help Bình Trí Soletrader in increasing its sales revenue and profit?

Submitted By shinyinguyen
Words: 2848
Pages: 12

Content

1. Abstract...................................................................................3
2. Introduction.............................................................................4
3. Main results and findings.........................................................5 4. Analysis and discussion 4.1............................................................................................13 4.2............................................................................................13 4.3............................................................................................13 4.4............................................................................................14 4.5............................................................................................15 4.6............................................................................................15 4.7............................................................................................16 4.8............................................................................................17
5. Conclusion and recommendations...........................................17
6. Bibliography and references.....................................................18
7. Appendices...............................................................................19

1. Abstract

Bình Trí sole trader company is facing a great loss for the 6 products specifically in August (Appendix 8). The owner claimed that the strong competition in the market place is the main cause to this problem (appendix 3, question 7).

As there are limitations on obtaining data for every products within the company, the IA will only focus on the 6 representative products and 2k-008(branded product), where discrimination pricing is being used (appendix 6, question 6).

Therefore, my Research question : "To what extent will a price discrimination strategy for every product help Bình Trí Soletrader in increasing its sales revenue and profit.

The internal assessment report shows that discrimination might be more advantageous for earning a high profit and sales revenue in long term. The report focuses on 'factors affecting the price' such as customer' base, demand, competitive market and economic growth.

The author strongly recommend that Bình Trí should apply the discrimination pricing for the six representative products in order to maximize profit and revenue, considering the economic growth, price inelastic products and customers' loyalty. The strategy will work best if it is in charged by an expert in the business to minimize the risk of making loss and profit could be maximized.

2. Introduction:

Price is an essential element within the bounds of 4Ps. Inappropriate pricing strategy would lead to loss and some other enormous affairs.

Bình Trí is a sole trader and a medium size paint and chemical business, including manufactured and imported products. However, this Internal Assessment is only focused on imported chemical products and one of the own branded products, 2K008. The owner is currently applying a competitive pricing strategy for imported items (appendix 2, question 2), and a discrimination pricing strategy for own branded products, such as 2K-008 (appendix 6, question 6). Bình Trí recently have been suffering on the loss due to the large competition field in the market, which have driven the price down too low.

Discrimination pricing on the other hand can obtain a higher profit but can also be affected by many other external factors: economy growth, overall production of oil, oil price and demand of customers. Discrimination is claimed to be more favorable in earning a higher profit and total sales revenue theoretically (Paul Hoang ). However, customers' behaviors can be a…