Aluminum goods are smelted and supplied by Dubai Aluminum Company Limited. For automatic applications involving engine cradles, wheel rims, subframes, and extrusion billets for building, transportation, forging, and industrial uses, DUBAL provides the foundry alloys. Additionally, DUBAL produces aluminum products used in the production of computer hard drives, capacitors, memory, and aerospace components (In Bearne, In Dupuis, & In Tarcy, 2016). Given that it services customers in Asia, Africa, Australia, Europe, South, and North America, the business is a global enterprise. Pricing strategies used by Dubai Aluminum Company value-based pricing techniques when setting prices for its products.
Every product produced for sale has some cost that is factored throughout the production process. The cost of raw materials, production cost, and administration expenses are the normal costs that are incurred by manufacturing companies such as DUBAL. Therefore, DUBAL manufactures aluminum products thus it has been using the cost-plus pricing model (Wiley IFRS 2016: Interpretation and Application of International Financial Reporting Standards. 2016). The cost-plus pricing model is one of the pricing models that DUBAL has been majorly applying when fixing process for its products because the model involves the cost of raw materials, production cost and delivery cost and percentage for profit.
The prices of the raw materials and production cost fluctuate thus DUBAL has been encountering some complication in deciding the prices due to the reason that there are competitors in the market such as UC Rusal and Alcoa in Russia and USA respectively. The availability of the competitors contributes to the difficulties in determining prices of the products because the source of raw materials and production cost differences among the producers thus prices of the finished products vary. The major competitors such as UC Rusal and Alcoa also use cost-plus pricing technique but due to the variance in input costs the selling prices of the finished aluminum products vary; hence DUBAL has been applying value-based pricing particularly on its major customers who buy DUBAL’s products in bulk and have been loyal customers (Baines, Fill, & Rosengren, S. 2017).
The value-based pricing is applied by DUBAL to its main and loyal customers to ensure such customers are satisfied. Quality of the products that are produced by DUBAL are majorly based on the customers’ specifications and the recommendation from the quality assurance and the marketing research team (Baines, Fill, & Rosengren, S. 2017). Marketing research team take deep research regarding the quality and the prices of the aluminum products that are supplied by the key competitors. According to the world aluminum market analysis, aluminum in the second most consumed metal after steel and it is expected to be consumed highly in future thus DUBAL keeps on considering the quantity, quality and the prices of its products.
In conclusion, DUBAL has kept a continuous improvement on its products quality. The pricing models such as cost-plus and quality-based techniques have been the core pricing models that have been helping the company to maintain its market share considering that there are other stiff competitors such as UC Rusal and Alcoa. Marketing strategies are critical activities that require experts who understand the international market, particularly for the aluminum products. Therefore, DUBAL has been investing in marketing strategies to ensure aluminum products market across the world is surveyed and analyze the market prices because economic conditions vary from one nation to another.
References
Baines, P., Fill, C., & Rosengren, S. (2017). Marketing.
In Bearne, G., In Dupuis, M., & In Tarcy, G. (2016). Essential readings in light metals: Volume 2.
Wiley IFRS 2016: Interpretation and Application of International Financial Reporting Standards. (2016). New York, NY: John Wiley & Sons.
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