Shaping the Market Offering
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You are an executive for a large multinational corporation and are meeting with other managers to discuss the following topic: Is the right price a fair price?
Prices are often set to satisfy demand or to reflect the premium that consumers are willing to pay for a product or service. Some critics shudder, however, at the thought of $2 bottles of water, $150 running shoes, and $500 concert tickets.
Take a position:
Prices should reflect the value that consumers are willing to pay.
vs.
Prices should primarily just reflect the cost involved in making a product or service.
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Solution Summary
You are an executive for a large multinational corporation and are meeting with other managers to discuss the following topic: Is the right price a fair price?
Prices are often set to satisfy demand or to reflect the premium that consumers are willing to pay for a product or service. Some critics shudder, however, at the thought of $2 bottles of water, $150 running shoes, and $500 concert tickets.
Take a position:
Prices should reflect the value that consumers are willing to pay.
vs.
Prices should primarily just reflect the cost involved in making a product or service.
Solution Preview
The answer to this question goes in line with an ethical approach to business. The real question is whether you are valuing your stockholders and owners or whether you are valuing your stakeholders which includes all people including employees, stockholders and customers. Thus, a company that is more inclined to value stockholders will go inline with "prices should reflect the value that ...
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