Harvard Business Review: The Case of the Pricing Predicament #1

Harvard Business Review: The Case of the Pricing Predicament
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Harvard Business Review: The Case of the Pricing Predicament
The Standard Machine Corporation, a company that offers machining services in the United States, utilizes the fixed policy as its pricing approach to all its customers including Occidental Aerospace, Scott Palmer most important customer. Occidental Aerospace has been for a long time, a loyal customer investing in all types of the ultra-modern automation that Standard Corp provides. The standard, on the other hand, has been effective in delivering quality products to their customer and investing in remarkable customer service by installing and monitoring the performance of their machine tool equipment after installation (Karr, 1988). They also provide comprehensive training for the machine operators on behalf of the purchasing company. They fix their prices based quality leadership as opposed to price leadership and thereby their bidding price for the supply of a computerized milling machine to Occidental Aerospace is justified.
Scott Palmer’s sales presentation to Joanne Braker representing the Occidental defends the price decision of Standard Corp. Scott tries to convince Joanne that Standard’s bidding price is justified given they are the best-placed company in a position to provide the best services promptly compared to the other bidding companies (Karr, 1988). He further argues that although one of the rival companies Akita also offers quality services that are quite remarkable, they are not readily accessible in the case of emergency technical hitches on the machines.

Scott possesses excellent communication skills when defending the price decision of his company, as he seems resolute about proposed bidding price. However, while conversing with his regional manager Tony, Scott appears to imitate the competitors by suggesting a price reduction. He seems distressed about the planned forthcoming projects of his customer, Occidental Aerospace which might not be even actualized (Karr, 1988).
Tony should provide a cost solution to the pricing difficulty that is justified for both parties and indeed bears value-added marketing (Dainty, 2016). He should also present a cost sheet that contains a complete break-up to Occidental Aerospace to explain the bidding price. He should also make attempts to understand what costs in the amount that is not essential to the purchasing team belonging to the Occidental Aerospace and consider economizing on them rather than assuming them as suggested by Scott Palmer. Tony may achieve this by arranging meetings and deliberations with the purchasing team for the Occidental Aerospace.
References
Dainty, I. (2016). The case of pricing predicament. Maximize business marketing. http://maximizebusinessmarketing.com/pricing-predicament-case-study
Karr, M (1988). The case of the pricing predicament. Harvard Business Review. https://hbr.org/1988/03/the-case-of-the-pricing-predicament