Harvard Business Review: The Case of the Pricing Predicament #1

Harvard Business Review: The Case of the Pricing Predicament
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Harvard Business Review: The Case of the Pricing Predicament
The Standard Machine Corporation, a company that offers machining services in the United States, utilizes the fixed policy as its pricing approach to all its customers including Occidental Aerospace, Scott Palmer most important customer. Occidental Aerospace has been for a long time, a loyal customer investing in all types of the ultra-modern automation that Standard Corp provides. The standard, on the other hand, has been effective in delivering quality products to their customer and investing in remarkable customer service by installing and monitoring the performance of their machine tool equipment after installation (Karr, 1988). They also provide comprehensive training for the machine operators on behalf of the purchasing company. They fix their prices based quality leadership as opposed to price leadership and thereby their bidding price for the supply of a computerized milling machine to Occidental Aerospace is justified.
Scott Palmer’s sales presentation to Joanne Braker representing the Occidental defends the price decision of Standard Corp. Scott tries to convince Joanne that Standard’s bidding price is justified given they are the best-placed company in a position to provide the best services promptly compared to the other bidding companies (Karr, 1988). He further argues that although one of the rival companies…