Economics for Managerial Decision Making: Market Structure Quasar Computers is a market leader for establishing their business around the Neutron notebook computer. Competition and the need to differentiate have required management to make profitable decisions to increase sales and revenue streams. The company must focus on aligning strategic variables with pricing and non-pricing options while considering how to rebrand Quasar to sustain marketability and a competitive force.
Strategic Variables
Quasar established their business in 2003, to make the initiative to produce a notebook that took over worldwide and was considered a monopoly. Consumers will know Quasar’s products uniqueness and the style of the computer once introduced
Penetration strategy would offer a quality product at a lower price. This strategy will enhance Quasar in the competitive market, and build long-term relationships with customers. This strategy increases the loyalty of a customer, and they are more likely to continue buying Quasar products in the future (Burns-Millyard, 2013).
Promotional pricing strategy, also known as loss leader will attract new customers even if Quasar does not make a profit from the sale. Taking a loss can offer other products that will sell at a normal price. Burns-Millyard (2013) indicated, “Despite losing profits on a promotional product or loss leader, enough profits are normally made from additional regular priced products or services to sustain the strategy for the long-term” (para. 1-5).
The premium pricing strategy takes advantage of customers who feel high quality products come with a premium price. Instead of having the lowest price, Quasar can use the premium price strategy to price their products at the highest price in the market. This strategy reduces the availability of products to customers but will provide larger profit margins (Burns-Millyard, 2013). Non-pricing strategies also attract customers differently than only focusing on costs.
Non-Pricing Strategies Non-pricing strategies focus on promoting and advertising products and services. Non-pricing strategies do not focus on pricing issues, but on promoting the products or services