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Pricing Strategies - Final

The document discusses pricing strategies used by lead banks and local banks. Lead banks, such as Commonwealth Bank, typically have lower pricing rates compared to local banks like Scotiabank for similar services. For example, withdrawal transaction fees are $1.96 at Commonwealth Bank but $3.64 at Scotiabank. Replacement banking cards also cost twice as much at Scotiabank. The differences in pricing strategies between lead banks and local banks can significantly impact consumer behavior and loyalty. Pricing is an important consideration for banks that aims to balance profits and customer satisfaction.

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91 views4 pages

Pricing Strategies - Final

The document discusses pricing strategies used by lead banks and local banks. Lead banks, such as Commonwealth Bank, typically have lower pricing rates compared to local banks like Scotiabank for similar services. For example, withdrawal transaction fees are $1.96 at Commonwealth Bank but $3.64 at Scotiabank. Replacement banking cards also cost twice as much at Scotiabank. The differences in pricing strategies between lead banks and local banks can significantly impact consumer behavior and loyalty. Pricing is an important consideration for banks that aims to balance profits and customer satisfaction.

Uploaded by

SirJason Analo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Pricing Strategies (Lead Banks vs Local Banks)

Student

Professor

Institution

Date
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Pricing Strategies (Lead Banks vs Local Banks)

High levels of technical development characterize a highly competitive financial system.

In addition to banks' world-class digital banking products and a slew of other ground-breaking

technologies, such as Lock, Block, and Limit or Cardless Cash, banks worldwide are pioneering

a slew of new initiatives. Global firsts in advancements have also benefitted bank consumers.

One of the most critical variables that buyers assess is the pricing of items and operations.

Pricing is the technique of determining a price while considering the institution's elements,

regulations, goals, and pricing approaches. When it comes to pricing, the 4Ps (price, location,

promotion, and product) must all be considered. Leaders of both lead and local commercial

banks are forced to make critical pricing choices.

The worth of a service is determined by client preference and the quality of the service in

a value-based pricing approach. The fundamental goal of value-based pricing is to align the

product's value for the consumer. As a result, rather than the product affecting the cost, the

pricing strategy is based on the demands of the consumers, which raise the value of the product.

Current marketing methods place a greater emphasis on client demands than on items. As a

result, satisfying consumer demands contribute to customer contentment, which leads to

customer loyalty. Value-based pricing is frequently associated with customer evaluations, and

determining the cost of services can be difficult. The high price of similar but inexpensive

services supplied by the Common Wealth bank is the basis for Scotiabank's pricing policy.

When rivals determine the price in a competitive setting, a competition-based pricing

approach is applied. This approach is prevalent in industries with limited product distinction,

such as banks, or when medium-cap enterprises compete with large-cap corporations. Because

most businesses compete in the same market for relatively similar items, competition-based
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pricing is frequent. However, the majority of companies use this pricing to improve and retain

consumers. We can safely deduce that based on the low pricing of services in the

Commonwealth bank, there are high chances that the bank utilizes this strategy to sustain

customers.

Although studies do not focus on the financial institution's performance, pricing impacts

consumer loyalty. Retail banking tries to please customers while also generating a profit. If they

are not cautious, financial institutions will focus only on producing profits, ignoring the changing

demands of their consumers. As a result, they must be careful while analyzing their pricing

tactics to keep their clients. If well-established, pricing may provide a plethora of options, and

financial organizations can swiftly expand.

Lead banks, for instance, exhibit low pricing rates compared to local banks that harbor

high pricing rates for comparable prices provided at the banks. Withdrawal transaction charges

for Commonwealth bank are lower than a local bank like Scotiabank (Bahamas) Ltd. While

Commonwealth bank charges $ 1.96 for withdrawal transactions, Scotiabank charges $ 3.64 for

the same service. The variation in the pricing of this service can significantly impact consumer

attitudes and acquisition of the benefits from any of the two banks in the same locality. Take, for

instance, another service offered by the two banks, say, replacement of banking card, Scotiabank

provides the service at twice as much the price provided by the Commonwealth bank $ 50. The

comparison of the various services the type of pricing strategy employed can go on and on. In the

end, the analysis will reveal the enormous disparity in the pricing strategy used by the various

banks.

A variety of technical, financial, geopolitical, and philosophical considerations influence

price judgments. Nevertheless, the discourse that surrounds this diversity of viewpoints should
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be centered on a few good concepts. The goal of pricing is to determine the best price that a

consumer can pay and is prepared to accept after considering offers, reductions, and other costs.

Pricing can influence an institution's financial success as well as its connection with customers.

As a result, the pricing process must be treated with the gravity it merits to produce beneficial

outcomes. In every business that deals with commodities or services, pricing is critical.

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