Evaluating Pricing Strategies for Small and Medium Enterprises (SMEs)

This report examines the pricing strategies employed by Small and Medium Enterprises (SMEs), focusing on the importance of a well-defined pricing approach. It highlights the significance of understanding customer perceptions, particularly regarding price and quality, and how these factors influence purchasing decisions. The report delves into the concept of value-based pricing, illustrating how companies like Captify utilize this strategy to align prices with customer needs and perceived value. It discusses the importance of market research and adapting pricing models to meet customer demands. Furthermore, the report emphasizes the potential consequences of inadequate pricing strategies, such as loss of market position, and the benefits of achieving a competitive advantage through effective pricing decisions. The report also references relevant academic sources.

SME
This is one of the most important and the remarkable mix and forms
the inseparable component of 4P's. Each and every consumer is
highly focused towards two constraints while purchasing the product
which is quality and price.
They want the best quality products in affordable price and hence
emphasis on price (Mayer, Melitz and Ottaviano, 2016).
Considering this view of the customers, Captify company have a
well-defined pricing strategy where it provided the customer with
the world-class quality at much reasonable price.
Pricing strategy
Value-based pricing strategy
Company generally uses the pricing strategy as per the
consumer fluctuating needs which is value-based pricing.
In value-based pricing, the price is generally set on the
basis of worth which the consumers perceive. It is
generally based on the needs and demands of different
customers.
This strategy helps the company to gain better
competitive advantage as in this the prices are generally
fixed according to the customer requirements (Jain, 2018).
This is the most effective pricing strategy which helps the
Captify to attract the customers.
Example
For example the hard disks which are normal and is the traditional system for
storing information and does not have much advanced technology as the other
systems is often perceived as low by the customer because they want the
advanced software which are easy to carry and thus provide advanced
solution to storage problems.
Thus, due to low perception, these products are prices low and offered to
customers (Baker, Collier and Jayaraman, 2017).
The Captify need to get the idea of right pricing strategy to fulfil the customer
demands, and if not done so, they would encounter various problems like loss
of position in market due to lack of proper market research on price.
References
Mayer, T., Melitz, M.J. and Ottaviano, G.I.,
2016. Product mix and firm productivity
responses to trade competition (No. w22433).
National Bureau of Economic Research.
Jain, D., 2018. Essays on pricing and
competitive strategy in information and
subscription markets.
Baker, T., Collier, D. and Jayaraman, V., 2017.
A new pricing strategy evaluation model.
International Journal of Operational
Research.29(3). pp.295-316.