Marketing distribution management Essay Example | Topics and Well Written Essays - 250 words - 1

Marketing distribution management - Essay Example Conversely, some consumers may not be willing or afford to pay the high price and therefore may purchase from a competitor. Microsoft Company utilizes value-added pricing strategy to sell its product in the market. In this perspective, the company determines the value of window operating system in determining the value to place on the product in the software market. The company sells the product at a high price because the product provides special, unique and valuable features not available in the market (Schindler  51). The strategy is the best for the company since it determines the cost of the product by what customers are willing to pay. On the other hand, the uniqueness and company’s brand name validate this pricing strategy. Traditionally, skimming and penetrating pricing approaches were used to determine the price of a new product in the market. Microsoft Company utilized the skimming pricing strategy in presenting the new window software in the market. The rationale behind this approach was to skim off the top of the market and therefore dominate (Schindler  96). On the other hand, penetrating pricing strategy involves introducing a new or innovative product at a low price in an attempt to gain a share of the