Marketing Management, Entrepreneurship.
This case meant for advanced undergraduate students, taking courses of marketing management that covers the topics related to pricing strategies. With regard to strategic marketing class, this case can be used to explain how pricing strategy plays significant role in attracting and retaining customers.
This case teaches about the importance of understanding the marketing strategies pertaining to pricing. Nora the entrepreneur of Baby Dreams focusing on baby items was in a dilemma in deciding the appropriate pricing strategy for her business. She was in doubt whether her low-price strategy which she believed was appropriate for the low- and middle-income groups was the best strategy for her business. The drastic decrease in sales pushed her to think about the effectiveness of her pricing. All together, Nora owned three Baby Dreams’ outlets. However, due to poor sales, she had to shut down two outlets in 2013. For the last outlet, she had to take an immediate decision in terms of pricing, as the start-up money was depleting, and with no improvement, it was expected to be finished by May 2014.
Using this case, students will be able to have an intellectual openness in accepting different ways of finding a solution for a particular problem. This case illustrates the importance of understanding the marketing strategies pertaining to pricing. Moreover, it is also highlighted that, offering low price is not the panacea of sales decrease. It is also necessary for the small business’s survival to look at competitors’ pricing effort to come up with a better pricing policy.
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