Based on studies carried out on the Australian Mobile market; it has been conclusive that ‘mobile data services’ have had an effect and increasing significance, as the returns from ‘voice calling’ are declining and at the same time trends show that mobile communication use is likely to advance. About the characteristics of the Australian mobile market; it has been clear from studies carried out that age is the most significant demographic trait influencing the mobile use trend and patterns of adoption. The other distinctive factor influencing the usage and patterns of mobile users are gender and household incomes; which significantly define the consumption of these services (Shaw, et al., 2002).
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The factors outside the company that significantly affect the pricing decisions, moves, and modalities of the company include ‘shipping and handling charges which are incurred in the process of bringing purchases into the business premises; the transit and installation of industrial plants and other expenses that have to be incurred before service delivery starts(Kottler, et al., 2004).
The other factor outside the company that affects the pricing of the company includes the sales tax environment which by either charging the company fairly or highly; will increase the level of expenditure for the company. The extra expenses, as a result, are passed on to the customer to bear; through being implanted into the pricing of the services. Another factor outside the company which will affect the pricing of the company is the impact of rebates by other companies; which depict a reduction in prices of products or services in the eyes of the customer without altering the shelf prices. As a response measure, the company will also have to fashion its marketing strategies to suit and reflect the same impact to the customer.
Other factors that will affect the pricing of a company are the use of sales promotional tools like discount coupons by other dealers and companies. Other factors outside the company that will affect the pricing of the company include the trends of inflation or deflation within the economy; which reflect in the pricing trends. Another factor that will affect the pricing of the company includes the clearance or short-term sales efforts of the companies with which; the company in question is competing.
The impact of cash discounts offered by manufacturers and suppliers of raw materials also affects the pricing of the company. Another factor likely to affect the pricing decisions of a company includes the devaluation or the valuation of labor; within the overall labor market which will mean increased expenses or returns to the company. One example of pricing changes within the Australian market is the revision of broadband internet pricing charges of Optus; which directly or indirectly will affect the pricing of other companies like Telstra and Virgin Mobile (Kottler, et al., 2006).
Some of the internal pricing factors to be considered by a company entering the Australian mobile market include the level of return on their enterprise; which will be determined and calculated based on the expenses, prices of raw materials, and pricing limits about competition. The other factor influencing pricing is cash flow where the company may decide to set minimal prices, with a move to have the expenses of production and marketing covered by sales returns.
The potential market share and the market potential of the company will also determine the level and strategies of pricing employed. The effort of maximizing profits is also another factor that affects the pricing of the company; especially if it is placed in an area it can dominate. From the analysis it is clear that the internal efforts and climate of the company will to a large extent affect the pricing of the institution; as can be seen from the market that companies like ‘people Telecom’ are offered personalized wireless internet services at the minimal possible hardware and software demands.
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The effort of providing broadband internet services at a minimal price by Optus; should give the company an idea of the pricing strategies and climate to expect within this market. Other factors to be given due consideration under this include the levels of market segmentation, operating demands, current and past performance of the industry, the expectations of industrial growth, development, and market trends(Kottler, et al., 2007).
In marketing and strategizing cannibalization is used to refer to the reduction of sales mass, returns, or market dominance of a similar product due to the introduction of a competing product by the same manufacturer. An example is where Telstra company providing internet services on a pay-as-you-use mode; will introduce an unlimited internet access plan which will draw some of the sales of the previous plan. Another example is the introduction of a new soft drink like Cherry Coke by the coca-cola company; with the view that it draws some of the consumers of Coke soda (Kottler, et al., 2007).
As a move to avoid cannibalism; the introduction of new products should be based on demand for the specifications; be geared towards addressing a problem or several problems; launch the product to broaden the market in general, by addressing the clientele not served by the present system; and based on the judgment whether your competitors are offering a product similar to what you want to introduce; and which is drawing your market share (Kottler, et al., 2009).
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Kotler, P. Brown, L. Adam, S. Burton, S. and Armstrong, G., 2007, Marketing. 7th ed. Sydney Pearson Education Australia
Kotler, P. Adam, S. Brown, L. and Armstrong, G., 2006.,Principles of Marketing. 3rd ed, Sydney: Pearson Education Australia.
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Shaw, R., Adam, S. and McDonald, H. (Eds.)., 2002, ANZMAC 2002. Proceedings of The Australian and New Zealand Marketing Academy Conference, Deakin University, Melbourne, Multimedia CD-ROM.