Wateen, product-life cycle & reactions to the enviornment

I's depressed to find out that my product, i.e., Wateen Wi-Max as whole, isn't doing good these days, because of its pricing and its competitor's prices and the value they give. What i mean to say is that more and more people are switching to DSL and other tribes of internet from Wateen, which had been for once an innovator of no category, back in 2007-8. Not only DSL the latest threat seems to be USB, so I am a bit relieved to hear this news that Wateen is going to launch USB Dongle soon. Apart form that, it has successfully re-launch itself with "unlimited packages and lower rentals for limited packages." Read this for more information.

What Mr. Wateen really is doing, is utilizing our book's Chapter 11 that talks about pricing strategies. Tough competition has hit hard the profit margins (based on pricing), and pushed its product life-cycle to the maximum. Therefore, what the re-launch indicates that they want to breathe air into its broadband's lungs.

We are actually watching theories being materialized around us, and that makes me adore this subject :)

Case Analysis: Pricing the product

Unfortunately, I couldn't attend the marketing class on pricing strategy. While browsing through a relic of history known as previous year's Marketing 280 blog (b'cause no one reads it these days), I came across a thought-provoking case question developed by Mr. Osama Hafeez (yes alone), Business junior, pertaining to the pricing strategy of a product. Here's what he has to say:

Case:

If I say I have made an innovative product, it's totally a new product concept, and I want to price it. The economy is in downturn (recession). How should I price the product? Of course, the price would be above the cost line. Normally, the companies set economy-inspired prices. But is this a sound strategy? Do customers always want cheapest prices?
Can lower price actually hurt rather than helping? Will it generate long-term negative perception about the product? (Example: Imagine Mercedez Does that)

(Note: This case has been totally developed by me (Mr. O. H.) and I want an “awesome” discussion regarding this topic (so do I).)

Read the comments of your class fellows here. I don't know anything about the pricing concepts, so what's your answer to his queries?

Product Mix Pricing Strategies

A lot of companies have products with variants rather than than offering just a single version of the product. This is done to target different groups of consumers so that the company can get something out of every segment. For this Product Line Pricing is used in which their are different price marks which then vary on quality, features, and requirements. For examaple Dell the PC manufacturer makes a lot of different versions of its Pcs which then range from $269 to $25000.
Optional-Product pricing is often used with Product-line Pricing in order to sell more to the customers, this is mostly done by electronic companies who prompt you to buy accessories as well with your original product for a better experience. Dell again is another good example of this as when ever you buy a Dell you get options to buy other accessories such as mice, speakers, keyboards, storage devices, flash drives, printers, etc. Car manufacturers are practice this to increase revenues as they offer add-ons such as alloy wheels, cd changers, leather interior, spoilers, and other trim options.
Then there is Captive Product Pricing, which involves selling and making products that must be used along with the main product. Examples being; printer cartridges, video game cartridges, Razor blades, staples, computer software, or camera film(or memory cards these days).
Another clever strategy is By-Product Pricing in which the company sells its By-products at a very cheap rate in order to attract customers to buy the firms main products.
Most Customers are very much attracted when they see Bundle offers, a company may earn more revenue by selling different products in a bundle and giving discount on it, this way they will be able to sell more and give the customers more value. A very common examples is of restaurants which make food deals like Mc Donlads, KFC, Pizza Hut, all they do is bundle in a couple of their products discount them a little and that's its. The customer would be more willing to buy a set bundle rather than buying the same things separately. This is called Product Bundle Pricing.