May 24, 2009
Develop a price, production, and distribution strategy for your product/service. Explain how this approach best
positions your company in the marketplace.
A price strategy considers such factors as market strategy, market mix, demand curve, costs, environmental
factors, price objectives, and determining pricing (Pricing Strategy, 2007). My market strategy is to target both
genders and all ages who are either beginning pianists or intermediate pianists in the Pocatello, ID and
surrounding areas. Because playing the piano is a luxury its demand is more elastic. Elastic demand means that
the market is more sensitive to price increases because a luxury can be foregone at anytime. Costs that need to
be considered are sheet music, insurance, equipment such as a blackboard or marker board, ink for the
printer/scanner/copier, the income I am foregoing by not working elsewhere, increased costs of utilities when
using my home, and various other minor expenses. Environmental factors would need to be researched.
Environmental factors to consider are the prices of various other private teachers, the cost of attending class
piano at Idaho State University, and lower-level school music programs. Pricing objectives would be, of course,
to maximize profit, revenue, quantity, profit margin, and cost recovery. I could accomplish maximization by
tracking revenue and costs. Quantity can be maximized by getting the most number of students in a week as