The significance of project pricing estimations can hardly be overrated; providing a strong foundation for the further financial strategy of the organization, it serves as a means of locating the financial issues that may possibly emerge and impede the process of the company development. Moreover, the estimations in question contribute to the creation of an elaborate allocation of the project resources, thus, providing the project members with options for addressing possible crises. Thus, even in the worst-case scenario, an organization may handle financial issues once the necessary estimations are carried out. Since the project in question is managed with the help of the principles of sustainability, requires a comparatively small amount of financial resources, and depends on the target buyers’ behavior to a considerable extent, it will be reasonable to assume that the project will have to be based on value pricing.
Among the existing pricing strategies, the one that includes a flexible system of discounts and a range of options for the customers’ needs to be mentioned. Fist and most obvious, the clients will have to be presented with opportunities to buy the target product cheaper. Specifically, the buy-two-get-one-free scheme will have to be considered as an option. While it would be unreasonable to make the selling price of the T-shirt equal to its actual value, it is still necessary to provide as many options for the target customers to save money as possible, since students typically tend to seek opportunities in terms of saving money. Herein the importance of considering the specified approach lies.
Another pricing system, which can be adopted in the designated scenario, the competition-based pricing system deserves to be mentioned as a rather efficient tool for attracting the target denizens of the population to what the project has to offer. According to the existing taxonomy, the specified tool helps the project strive in the realm of stiff competition (Kerzner, 2013). On the one hand, the above-mentioned approach can be deemed as fairly reasonable, seeing that there are a plethora of products similar to the one in question. On the other hand, it should be borne in mind that the product under analysis should be viewed as a token rather than an item of clothing. Therefore, a different strategy needs to be considered.
The penetration strategy could be viewed as an option if the product in question could be deemed as worthy of entering the market in question. While the approach in question helps build loyalty among the target denizens of the population, it requires a considerable amount of time. Nevertheless, the emphasis on the devotion of the customers to the product and the organization can be considered feasible, as the products under analysis are linked to the college directly and, therefore, have a brand name already.
The high end approach could be viewed as an option in case high-quality products could be provided to the target population. However, as it has been stressed above, the emphasis is going to lie on a reasonable price–quality ratio; given the time and the resources that the product in question has, it would be rather risky to promote it as a high-quality brand.
Another tool that can possibly be used for defining the pricing strategy of the organization, the loss leader approach (Markus, Manville, & Argus, 2013) should be viewed as an option. When it comes to considering its advantages, one must mention the fact that the strategy in question is based on the principles of sustainable resources usage and, therefore, will serve as a decent platform for developing the sustainable production process as well as the process of selling the goods.
The choice of the approaches listed above is primarily predetermined by the three “P’s” of four, i.e., the product, the place, and the promotion strategy. Seeing that the college campus is defined as the place, T-shirts being the key product, and the reasonable price–quality ratio being the key selling point along with the fun memories of the academic years, reducing the price of the product and offering numerous discounts will be the most sensible step. Therefore, the cost per unit must also be reduced significantly. Herein the necessity to locate cheap options for retrieving the necessary resources and arranging the production process lies (Larson, 2012).
Choosing between the five strategies described above, one should give preference to the latter as it allows for the most reasonable use of the project resources. Particularly, it creates the conditions, in which selling the product at the lowest price possible does not conflict with the allocation of the project resources. Particularly, the total number of costs taken in he course of the project completion does not exceed the benefit to be retrieved as the products are promoted to the target audience. In other words, the tool in question offers the pricing strategy based on the principles of a sustainable economy. In addition, it charts the road for the project to take in case of a failure. Indeed, though the chances for the project to attract a small number of clients are rather low, yet they still remain a possibility. Moreover, unpredicted costs may occur in the course of the project completion. The strategy in question, in its turn, will provide the members of the project with enough wiggle room for avoiding bankruptcy and retaining at least some of the benefits. Therefore, it should be viewed as the most favorable option.
The issue of labor distribution also needs to be touched upon as one of the key issues of the project. To enhance the promotion of sustainability in the project, the adoption of the U.S. General Services Administration LDS (Labor distribution system, 2015) will have to be considered. The specified system provides an opportunity to track down the key processes carried out in the system; as a result, the outcomes of the company’s transactions can be forecast rather easily based on the information provided after analyzing data with the help of the system in question.
Pricing out
Needless to say, in order to succeed in the target market, it will be necessary to calculate all costs, which will be taken to produce the T-shirts, i.e., retrieve the necessary raw materials, recruit the staff members, who will be involved in the production process, design the clothes, create and print the corresponding logo on them, develop an efficient marketing strategy, and create an elaborate way of delivering the products to the end customers.
A closer look at the costs, which the project will have to take, will reveal that the total sum required will make approximately $1,000. Seeing that 200 T-shirts will be produced, the cost per product will make $5. Hence, an item will have to cost at least $6 to cover the expenses. It is, therefore, suggested that every item should cost $10. Thus, the project will have extra resources in case some impediments will emerge and slacken the production process down.
Bidder
The lowest bidder issue also deserves special attention due to the controversy involved. Since the project under analysis ca be deemed as low-budget one, being overly selective in the choice of the labor force could be unreasonable. Thus, the project members will have to select the labor force on the basis of the lowest bid provided. The above-mentioned strategy, however, may lead to picking the staff of extremely low competency level; consequently, the quality of the products may be compromised, and the success of the project will be jeopardized severely. Thus, the same principles of sustainability will have to be adopted to address the dilemma in question. Although increasing the wages of the staff will be hardly possible, the project leaders may consider the idea of giving the staff members incentives, free products, and the chances to get free extras. Thus, the project managers will have a chance to increase the bid and, therefore, make sure that the staff members are of the required competency level.
Produced in a rather small amount and for the audience that is unlikely to pay a large amount of money for the products in question, the goods in question will have to be offered for a reasonable price to the target audience; herein the need to adopt a flexible and sustainable pricing policy so that the project would not fall apart. In other words, a sustainable approach based on the reasonable allocation of the project resources.
Reference List
Kerzner, H. (2013). Project management: a systems approach to planning, scheduling, and controlling. New York Coty, New York: John Wiley & Sons, Inc.
Labor distribution system. (2015). Web.
Larson, R. (2012). Calculus: An applied approach. Boston, Massachusetts: Cengage Learning.
Markus, L. M., Manville, B., & Argus, C. E. (2013). What makes a virtual organization work: Lessons from the open-source world. Web.