The pricing strategy used by a company can greatly contribute to its success. Samsung utilizes a unilateral pricing policy for its products. The use of this policy enables Samsung to set the minimum prices at which their products can be sold. Resellers who violate the terms of this policy can be prohibited from selling the company’s products (Morrison, 2013). The use of this pricing strategy has benefited Samsung in various ways. It has enabled the company to protect its brand image. The modern market is saturated with various manufacturers selling their products at varying prices. The variations in prices create confusion among the customers. It also creates chaotic market conditions. The use of a UPP creates consistency and inspires loyalty from customers (Denison, 2013). Customers do not have to spend a lot of time moving from one store to another in search of better prices as they are all standardized. Many customers associate price with quality. Samsung customers, therefore, believe the company’s products are consistent and of higher quality than products from other manufacturers.
UPP shows that the company continually regulates its products which attracts new customers. Many customers also like to associate themselves with high valued brands. They expect better quality from pricier products and may be suspicious of cheaply priced products. Therefore companies which do not use this pricing policy lose out on the high-value customers. The stability in the pricing of the company’s products insinuates order and control and therefore the company’s customers are more likely to stay with the brand. The use of a unilateral pricing policy also creates order among the company’s resellers. New and existing customers are attracted to a company that is in control of its operations. They expect better quality and improved customer support.
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References
Denison, C. (2013). The sale is dead! Here’s why TVs cost the same at every retailer now. Retrieved from https://www.digitaltrends.com/home-theater/the-sale-is-dead-this-is-why-tvs-cost-the-same-at-every-retailer-now/
Morrison, G. (2013, November 25). What is UPP? Or, why do TVs cost the same at every store? Retrieved from https://www.cnet.com/news/what-is-upp-or-why-do-tvs-cost-the-same-at-every-store/
