Few years back HP launched four new computer models aimed at

Few years back, HP launched four new computer models aimed at the Chinese and Indian consumer markets to create loyal customers as these markets emerged. Using penetrating pricing strategy, HP priced the new computers under $400, significantly less than its computers sell for in the United States. Do you think this type of pricing strategy can be successful? Why or why not? What steps do you predict HP will take as it sets prices for products in these markets in the future?

Solution

Customer wants quality products at reasonable price.If HP is targetting middle class income segment then this pricing strategy will be very good.

But withthis pricing strategy HP will have to sell more products to make profits.

HP will haveto analyse the income levels of these nations, customer preferences before setting price.HP has a good brand image in these countries and worldwide so it will not be difficult gor HP to use this strategy.

Once it has penetrated in these markets HP can increase the prices of its products.