Materials Markets The internal environment is under the control of the marketer and can be changed with the changing external environment. Nevertheless, the internal marketing environment is as important for the business as the external marketing environment. This environment includes the sales department, marketing department, the manufacturing unit, the human resource department, etc. External Environment The external environment constitutes factors and forces which are external to the business and on which the marketer has little or no control.
AirAsia with lower costs can set lower prices that result in greatest sales. Then, AirAsia implement such ways to make costs lower, for examples quicker turnaround time, flight utilization of its aircraft, flies only one type of aircraft to reduces staff training, operation and maintenance costs, does not offer complimentary meals or drinks.
Company handle pricing in a variety of ways. In industry in which pricing is a key factor, company often have a pricing department to set the best prices or to help others in setting them.
AirAsia have a pricing department to set the prices for each flies. This department reports to the top management. External factors that affect pricing decision include the nature of the market and demandcompetition.
There are few sellers because it is difficult for new sellers to enter the market. Consumer perception of price and value also affected the price. Consumers perceive that the price is below the value, they will continue to consume it.
Next factor is competition in the market. What type of new product pricing strategy did AirAsia employ? Pricing strategies usually change as the product passes through its life cycle. Companies bringing out a new product face the challenge of setting prices for the first time. They can choose between two broad strategies which is market-skimming pricing and market-penetration pricing.
As mention in case study, we can see that AirAsia employ a market-penetration pricing as a type of new product pricing strategy.
The high sales volume results in falling costs, allowing the company to cut its price even further.
Several conditions must be met for this low-price strategy to work. First, the market must be highly price sensitive so that a low price produces more market growth. Second, production and distribution costs must fall as sales volume increases.
Finally, the low price must help keep out the competition and the penetration pricer must maintain its low-price position. AirAsia periodically runs price promotions. AirAsia manages to offer such discount prices by keeping costs down.External factors that affect pricing decision of ALDI: Customers and consumers: ALDI targets mainly the sector of people whose main concern is low price and ALDI follows the strategy offers the product at the lowest price possible.
Global factors influencing business are legal, political, social, technological and economic.
Understanding of these factors is important while developing a business strategy. a. Social factors - These factors are related to changes in social structures.
These factors provide insights into behaviour, tastes, and lifestyles patterns of a population. External factors that affect pricing decision include the nature of the market and demand, competition.
The market and demand in oligopolistic market, pricing in oligopolistic competition, the market consists of a few sellers who are highly sensitive to each other’s pricing and marketing strategy. Aldi Marketing Essay example; Aldi Marketing Essay example.
Words Sep 2nd, 11 Pages. What distinguishes Aldi from its competitors is its competitive pricing strategy without reducing the quality of its products. to examine both internal and external factors that drive Aldi to the current successful position in the UK highly.
Internal factors affecting pricing decision Generally, internal factors can be controlled or altered. There are certain internal factors like organizational policies, differentiation in services, cost or service and marketing mix that affects pricing decision a lot.
SWOT analysis focuses on the internal factors which are the company’s strengths and weaknesses as well as the external factors which are the opportunities and threats which are gained from situational analysis, which focuses on summarizing all the pertinent information acquired about the key three environments of internal, customer, and external (Ferrell & Hartline, , p.