Farmer’s Scenario Strategy Research Assignment Paper - 825 Words

Farmer’s Scenario Strategy Research Assignment Paper (Essay Sample) Content: NameProfessorCourse NumberDateFarmers scenarioHow urban farmz might use a combination of cost-based, demand-based and competition based pricing for the products it sells in pursuit for profit.Starting with cost-based pricing, urban farms can set a reasonable price for its products considering two main factors. One factor is the capability of the potential customers to purchase their product. Urban farms need to set their cost in a way that its potential customers are in a position to purchase their product. Not too high for the customers but at the same time, making sure that it is making enough and reasonable profit for itself (Chan, 2013). The other factor is the cost of production. The farm need to look at the cost of production before setting the cost. The farm should then set the cost of its product at a higher price than the production cost. This will ensure that the farm makes profit. Basing the argument in terms of demand, it seems that urban Farms products ar e highly demanded by customers.The farm should take this as an advantage by slightly increasing the cost of their product. This increase will enable them make more profit for themselves considering the fact that it wont have a very huge negative impact on their sales since the demand is quite high and impressive. Looking at the area of competition, the farm ought to consider the cost of similar products offered by other entrepreneurs. For market purposes, it ought to set the cost of its products slightly lower than that of its customers as it is evident from the scenario that customers go online to look at how the various prices range from each other. This should be done bearing in mind that one of the main purpose of any business venture is profit, therefore, the prices should not be too low such that they adversely affect the profits. Combining this factors as explained above, urban farms would be enjoying a good profit.The perception consumers will have for the different prices o f the bar soap sold by urban Farmz and that sold by the soap maker and the recommendations regarding this price difference.Considering the fact that urban Farmz products are diversified by being organic certified, customers will most probably see the product as of a higher quality than that of the soap maker. This will make them accept the fact that Urban Farmz products should be slightly costly than that of the soap maker. Having the same price would in fact confuse the consumer. This means that the thoughts of Caleb are correct and to the point. Adding a $ to the price of the bar soap will be of great advantage to Urban Farmz since they will be making much more profit. In this case, its recommendable for Urban Farmz to have their prices slightly higher than those of the original soap manufacturer. However, while setting this prices, the farm ought to be very keen not to set its prices too high.Setting the prices to be too high will not only be an added advantage to its competitors but also a loss of their clients trust. This is because its natural for a person to tend to save some cents for himself when purchasing a product in regardless to the quality of whatever he is purchasing. No one would like to purchase a product at a very high price knowing that he can get a similar product at a lower and much reasonable price (Anthony, 2005).Whether its recommendable for Urban Farmz to use promotional pricing at the farmers markets and the techniques which they can useIts quite recommendable for urban Farmz to use promotional pricing at the farmers markets. This will help them grow their client base and enable them have a greater market command than their competitors. To do this, the Farm can apply a number of techniques. To start with, the Farm can use the technique of special events pricing. This involves giving discounts to customers during certain days especially during the holidays. When the potential customer gets these products during the holiday, he can see the benefits of the product and gets convinced that the product is of the quality he wants. This will make the person to become a great loyal customer in the future. The technique of longer payment terms is also another suitable technique which Urban Farmz can apply to promote their products. This involves giving customers suitable payment terms.Telling your loyal customers that they can pur...