PRICING MARKETING PLAN 2
Pricing is an integral part of any business. As pointed out by Nagle & Müller (2017), it
ensures that the business meets its objectives, fosters continuous operations and growth, and
promotes customer satisfaction. Various pricing strategies can be employed based on the nature of
a business as well as its internal and external environment. As such, in determining the pricing
approach to be used by this business, one has to have an in-depth understanding of the security
consultation industry, the marketing challenges, and buyer behavior. Based on the previous
discussions on these aspects, it is evident that the most effective pricing strategies for this business
are economy pricing and premium pricing strategies.
Economy Pricing
Economy pricing is a pricing strategy whereby a business sets its prices at the minimum
and in most cases lower than its competitors. To effectively implement this strategy, the business
will have to lower its various costs including marketing and operation costs. The business will also
have to capitalize on economies of scale. These factors will enable the business to lower its prices
without incurring huge losses. By using economy pricing, the business will be focusing on luring
customers, getting its products into the market, and attaining increased sales (Nagle & Müller,
2017). Ultimately, this will result in increased revenue and profits as well as dominance in the
security consultation industry.
However, despite the various merits of economy pricing, it also has some demerits. One
key setback the business might face after implementing economy pricing is price wars. As noted
by Lancaster & Massingham (2017), a price war is a major demerit in economy pricing. By setting
the prices lower than those of its competitors, the competitors are likely to lower their prices to
maintain a competitive advantage. Some of the well-established competitors who benefit from
economies of scale may lower their prices even further. As such, the approach may not achieve its
