paper 8 - Evan Drummond Lowering the price of any product...

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Evan Drummond Lowering the price of any product could mean a number of things within the market of the product. For example, in tough economic times, consumers may not have as much disposable income to spend on luxury items such as an outdoor swing set. In return, the manufacturer of the outdoor swing set may look to lower the price of their product. Lowering the price of the product would seem to yield more sales; however, there are many more factors and consequences that will come with dropping the price of said product. A couple of recommendations are in regards to looking at pricing adjustment strategies, such as, demand- based and yield management strategies. When a price of a product drops, there may be more sales; however, there are also some consequences related to the price drop. As shown through prestige pricing, customers tend to base the quality of a product with the cost. Therefore, with the reduction in price, the psyche of some customers may be that the product is of lesser quality now. In contrary, it could work to the benefit of the manufacturer to charge more for their product, as customers may believe it is of higher-quality since it is more expensive than other comparable products. Also, in regards to a children’s swing set, if a consumer thinks the product is made of lesser quality due to the drop in price, then that will lead to the assumption that it is unsafe and may scare off consumers. An
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