Strayer University

Introduction to Physical Science

Professor: Wayne Whiting

Price Strategies & Marketing Channels

11/17/2010

By John B. Webb IV

Abstract
In Health Service Administration there are several components that affect the everyday business of HCOs from customer service, accounting, human resources, etc. Yet the focus on the component of marketing with HSA of HCO has become big business in recent years, because of the growth of health care ingenuities, innovations, and the latest implementation of IT infustructures. The focus has drawn new priorities of HCO business practices and competition of HCO has risen to where new marketing channels and pricing strategies have been and will continue to develop to meet the demand of business functions of HCOs in the new age. Details on which strategies and or channels for gain advantage have established concepts in researching tough questions for the best options and or alternatives for both Pricing strategies and or marketing channels, which may include seven steps for setting an initial price for a product or service, four main decisions that companies face in managing their channels, ways an organization can respond to a competitor’s price change, and how effective health care delivery channels can be designed.

In order for an organization to be successful it its pricing strategies and its marketing channels, processes of research, analysation, selection, and evaluation must be conduct on its products and services that it has, does, and will supply. For this organization to have the best price and superior marketing channels utilized in its chosen market of industry, thorough delegation and management of implementation of these processes to reach superiority involve several steps, ways of adaptation, design of these processes, and decisions of marketing after and during these processes. These processes are to establish sound business practices, of best price marketing within operating channels of designation towards it consumers.  1. Explain at least four of the seven steps for setting an initial price for a product or service. 

In order for HCOs to introduce a new product, introducing current products/services integrated into new methods of distribution, and or introducing existing and new products/services to a geographical area of interest, a price must be set in order to gain profit, will financing cost of production and maintenance of business functions that support these products and services. Adding to this concept of price setting, pricing policy is a tool continuously used by HCOs to ensure that price setting for different circumstances are being followed with in accordance with what a HCO has planned for financial responsibilities to its customers and business functions. To develop strategic price settings to maximize profit gains and maintain funding of HCO business practices, Kilter, Shalowitz, Stevens (2008) states that “ To help an organization consider the many factors in setting its pricing policy, we describe a seven-step procedure: 1.selecting the pricing objective; 2. Determining demand; 3. Estimating costs; 4. Analyzing competitors’ costs, prices and offers; 5. Deciding whether to use price as a competitive strategy; 6. Selecting a pricing method; and 7. Selecting the final price.” The four steps in this procedure that stood out the most to me are the: 1. selecting the price objective. 2. Determining demand, 4. Analyzing competitors’ costs, prices, and offers, and 7. Selecting the final price. All four of these steps are effect how a HCO can structure its supply and demand, while maintaining best price options for effective gains in profit and the grow of customers in need of its products and services. Step 1 selecting the price objective, involves the positioning of a HCO market offering including 5 possible objectives that will fit the position in the HCO pricing of its products and services. These 5 objectives are 1. Survival, 2. Maximum current profit, 3. Maximum market share, 4. Maximum market skimming, and or 5. Product-quality leadership. The main concept of survival is what Kotler, Shalowitz, Stevens (2008) describe as “As long as prices cover variable costs and some fixed costs, the company stays in business.” This objective is for the purpose of maintaining cost of business functions in its market position. Maximum current profit is stated by, Shalowitz, Kotler Stevens (2008) as the “companies estimate the demand and costs associated with alternative prices, choosing the one that produces maximum current profit, cash flow, or rate of return on investment.” The maximum market share is set on setting marketing penetration pricing strategy to ensure higher sale volume that could produce lower cost per unit, and higher long-run profit. Objective 4 Maximum market skimming is set at gaining as much profit as possible in a short period of time “short run”. This is done by setting prices high at the beginning of product or service distribution, and then lower the price over time when product and or servi...

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