Assignment 3: Long-Term Investment Decisions-Low Calorie Microwavable Food Company

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Outline of plan for pricing strategies to reduce products price elasticity

Low calorie Microwavable Food Company should consider the following pricing strategies to reduce price elasticity to achieve maximum profits.

1. Branding: This strategy involves creating a unique product identity, which customers can easily relate with and attach high quality. Branding is the process of creating an image or idea of a product or service in the market arena, which increases the demand for such product. It may include changing the packaging, creating brand names and improving the quality of a product. Once a brand is build, a firm succeeds in creating a major difference in the minds of customers between their product and those of competitors. Once a product attains a positive outlook in the mindset of consumers, the organization attains brand equity, which brings competitive advantage for the firm as customers view the products as unique or superior, which effectively reduces the pricing elasticity as substitute products become less close to their product.

2. Product differentiation: In this pricing strategy, the firm should seek to identify and highlight the differences between its products and those of competitors. This allows the firm to make their product unique and more attractive to customers, contrasting its unique qualities with competitors. Since Low calorie microwavable Food Company concentrates on healthy foods, it should strive to use more healthy spices and ingredients for its products, which should be highlighted to the customers.

3. High-Low pricing strategy: This strategy involves periodic pricing differentiation, where the company occasionally changes the pricing of its