You are the CEO of a company. You have two customers (one larger and one smaller

Question

You are the CEO of a company. You have two customers (one larger and one smaller than your company).

They are asking for a 10% price reduction for the product/service you are providing. You are considering three possible options

a- Lower the price for the smaller customer only

b- Lower the price for the larger customer only

c- Lower the price for both customers

Use Act Utilitarianism to analyze each of the three options.    You must use a table with stakeholders (at least 3) and possible outcomes (at least two) for each option. List any assumption made to quantify costs and benefits.

Based on the analysis, which action is the right thing to do?

Thank you so much for the help!

Explanation / Answer

The act of utilitarian states that a person's act is morally right if it produces the best possible results in that specfic situation . This is based on the principle of utility. Jeremy Betham supported the theory with the phrase " Nature has placed man kind under two sovereigns masters - PAIN & PLEASURE.

Every business has competition & no company wants to loose its customers wheather the company is larger than your company or smaller than your company.

1) Not engage in price war.

2) to use the strategy to battle lower prices

A)In the case to lower the price for the smaller customer - this cannot be accepted as in case we lower the price than we will loose our goodwill, reputation,& the competition value so this cannot be possible.

B)In case B we also cannot lower the price for the larger customers then their is the possibility to loose the smaller customer when the smaller customer will come to know that the company gave 10% reduction to the larger company.

C) in the cases we can only give reduction of 10% to both the customers .

The only left way out may be possible to give some incentives on their purchases of high orders & the values exceeds

a) Another possibility is to calculate( NPS) Net Promoter score to figure out customer loyality.

b) Interview your customers & make them feel that its asimple conversation regarding the reduction of prices Here we can use the B2 B Sales tactic.

c) Audit internal marketing materials before taking any decision

We can also ask the customers that the customers by differenting by the feature 2) show differentiation by quality 3) differentiate by pre -existing relationship 4) differentiate by convience 5) differentiate by strategic relationship.6) use of multipe approaches.

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