Pricing the product
A Bryant Homes case study

Page 1: Introduction

Pricing is one of the most important decisions made by any business organisation. Economists use the term market clearing price to identify a price at which sellers are prepared to sell because they feel they are getting a fair price, and buyers are prepared to buy because they feel they are getting value for money. If prices are too high or too low the market will fail to clear. The housing...
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Page 2: Objectives

Business specialists like to talk about the 4 Ps of the marketing mix - product, place, promotion and price. In examining how Bryant goes about pricing its houses, it is helpful to consider first the other 3 Ps. Bryant is able to price its products in the premium range because it offers some of the very best new homes (product), in attractive and sought after locations (place) and, of course...
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Page 3: Pricing structure

Pricing is a very important aspect of business. In pricing a product, the emphasis will be on: covering costs and then having a margin of profit on top making sure that the pricing structure gives a competitive edge over similar products (if any exist) providing an adequate return to providers of capital and shareholders in a company. Bryant Homes sets out to charge premium prices for premium...
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Page 4: Pricing strategy

Bryant has set itself the target of achieving a 5-10% premium on its sales values. To achieve this objective, its production and sales activities are all geared towards emphasising the four core values of: location - being in the most desired spots individuality – providing properties with individual characters density - having fewer houses per acre than rival producers specification...
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Page 5: Pricing decisions

We have seen that Bryant’s pricing decisions are determined by a sophisticated mix involving - more than covering costs, charging a price that reflects the perceived and actual quality of the product, charging more than inferior competing products, charging a price that provides a healthy return on capital invested, etc. We have also seen that Bryant’s buying and selling activities are...
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Page 6: Conclusion

The Bryant case study provides a fascinating outline of the key factors that go into pricing decisions in the new homes market. The right price today will rarely be the right price next year because there are so many variables in the housing market. The successful organisation needs to be alert to find out what these changes are. That is why market research is so important to an organisation...
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