Various Pricing Strategies

Strategic Marketing Plan

This paper will discuss the possible strategic marketing plans for Booksforall.com, which is an online bookstore where customers will have the ability to purchase books and other periodicals and published works sold at full retail price, while also offering discounted items. Based on the possible strategies, pros and cons will be assessed, and the business will be considered to conclude which strategy is the most appropriate for the online bookstore to help place it in a successful position in the market space. The target market for the business will mainly include students who are looking to purchase books for school, but also include anyone who is interested in purchasing a book or other published work, whether it is for leisure or research.

Various Pricing Strategies

Completion Pricing

Completion pricing strategy is described as, "Businesses have three options when setting the price for a good. They can set it below the competition, at the competition or above the competition" (Investopedia.com, 2013). In order to compete with the few remaining local book stores where a person can go buy used books, we have to stay competitive and offer sale items like free shipping, Buy One Get One days and a low overall mark up. Monitoring various websites based on the sale and value of specific volumes like rare first editions will be needed to factor into the daily or weekly sales rate.

Value Pricing

Value pricing strategy is defined as, "by contrast, cost-plus pricing is based on the amount of money it takes to produce the product" (Investopedia.com, 2013). The higher the value is placed, the higher the mark up will be, while still remaining competitive with the storefronts. A weekly online ad and pricing list available through an email listing and also by using social media will allow the competitive edge to stay sharp.

Cost Based

Cost based strategy is defined as, "a pricing method in which a fixed sum or a percentage of the total cost is added (as income or profit) to the cost of the product to arrive at its selling price" (Business Dictionary.com, 2013). The main competition beyond the local storefronts and auction houses, are mass auction and consignment sites like EBay and Amazon. The benefit of having these competitors is that the actual cost can be monitored and modified accordingly based on the standing trends and wants of demographics. This adjustment in prices may affect overall profit margins but allow the endeavor to remain a float.

Going Rate

Going rate is described as, "setting a price for a product or service using the prevailing market price as a basis."(Business Dictionary.com, 2013). The Buying aspect of the IP is fixed around going rate and mark up simply because if a book is only worth $25 we won't pay more than $10, for example.

Target Return

Target return is described as, "the process of setting an item's price by using an equation to compute the price that will result in a certain level of planned profit given the sale of a specified amount of items." (Business dictionary.com, 2013). The shifting trends of fandoms, movie versions of books and other popular spikes, will dictate the value, buying and selling price of the books in stock. The prices will vain and rise over time but with trained staff on hand nothing will majorly shift.

Mark Up

"The difference between an investment's lowest current