Mod5-SLP- USPS Pricing Strategies

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PRICING STRATEGY

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PRICING STRATEGY

INTRODUCTION

How a company sets its commodity 's prices determines its profitability and competitiveness in any given economy . United States Postal Service is the federal corporation mandated with a task of providing all postal services to Americans without discrimination of race , locality or fiscal status (Woodruff , 2009 . With such a broad mandate , it becomes extremely difficult for a company of its size to make pricing decisions in consideration of the capabilities of all the

people and still remain profitable and relevant . However , its status as a government entity has many advantages which have enabled it to remain the biggest courier in the United States . theless , competition from private firms has necessitated management to find means of venturing out to the international markets to sustain its profits and market share

PRICING STRATEGIES AND TACTICS

There are several strategies that companies can use to price their commodities . Such strategies are dependent of legislations and the nature and diversity of the products each individual firm offers (Wood 2007

PENETRATION PRICING / PRICES BELOW MARKET PRICES

For new companies , penetration pricing which is the setting of prices below the market price can be employed to attract new clients to the new business . In addition companies like USPS which are government owned usually have very low prices due to legislations that waiver tax on their revenues . This ensures that rival private firms cannot match their prices since if they did so , they would...