Nokia Pricing Strategy
Studied in- Mobile Industry
Background of the study:
Pricing Techniques: are the methods adopted by a firm to set its selling price. It usually depends on the firm's average costs, and on the customer's perceived value of the product in comparison to his or her perceived value of the competing products. Different pricing methods place varying degree of emphasis on selection, estimation, and evaluation of costs, comparative analysis, and market situation. It takes into view factors such as a firm's overall marketing objectives, consumer demand, product attributes, competitors' pricing, and market and economic trends. The term pricing technique is also called cost plus because it attempts to …show more content…
From a social welfare perspective, first degree price discrimination is not undesirable. That is, the market is still entirely efficient and there is no deadweight loss to society. However, it is the complete opposite of a perfectly competitive market. In a perfectly competitive market, the consumers receive the bulk of surplus. In a market with first degree price discrimination, the seller(s) capture all surplus. Efficiency is unchanged but the wealth is transferred. This type of market does not much exist in reality, hence it is primarily theoretical.
Nokia introduces its phone at the highest price to extract the entire consumer surplus it can.
First Degree Price Discrimination by Nokia: | Releasing Price | Nokia 8800 Sapphire Arte | Rs. 62,829 | Nokia E90 Communicator | Rs 40,499 | Nokia N95 8 GB | Rs 34,999 | Nokia N95 | Rs 31,900 | Nokia N93i | Rs. 37,500 | Nokia N91 8GB Music Edition | Rs.19,999 | Nokia N81 | Rs 26,970 | Nokia N70 Music Edition | Rs. 19,789 | Nokia N72 | Rs. 17,500 | Nokia N73 Music Edition | Rs 22,l000 | Nokia E71 | Rs 22,949 | Nokia E66 | Rs 23,689 | Nokia 5800 | Rs 19,835 | Nokia 7500 Prism | Rs 11,200 | Nokia 6300