Complete Product strategy

  • Category:
    Marketing
  • Document type:
    Assignment
  • Level:
    Undergraduate
  • Page:
    1
  • Words:
    515

Market pricing strategy

The Canberra Black Forest Café will need a clear market pricing strategy to face off well with their competitors. Salgado-Beltran & Subira-Molera (2012) defined pricing as the expression of the value of a commodity in terms of money (p. 20). It is a fundamental element of the market mixing as it determines what the company’s turnover will be (Learnmarketing). Before deciding on what price to charge, the company will have to diversify the product. This is necessary as it would ensure they serve a variety of consumer preferences.

Different methods of market pricing can be used depending on their appropriateness. For one, they may opt for penetration pricing amongst others. This method involves temporarily charging unusually low prices to grab a particular market portion (Marketing Teacher, 2016). As the customer bases, grows the price is then increased.

They may also go for competition pricing. This will entail considering the prices that their rivals charge before deciding on their own (Marketing Teacher, 2016). They may charge lower prices which will likely drive their competitors’ customers to shift their loyalty. However, charging lower prices may result to unsustainable turnover. They, likewise, may opt to charge the same as their rivals or even slightly higher.

Another strategy worth considering will be skimming pricing. This refers to the setting of a higher price initially, but then it is gradually lowered so as to access wider markets (Learnmarketing). This will, however, only be suitable and sustainable if they have the undue competitive advantage over their rivals. But it is important to realize that the high price charges are likely to attract other firms into the industry. The entry of other firms may create excess supply which may eventually bring the prices down.

Psychological pricing may be a favourite pricing policy as it appeals to the consumers’ emotions. The company, for instance, may sell a bar of chocolate at 0.99 cents instead of $1(Learnmarketing). The consumers are likely to brim will self satisfaction considering that they have bought the product at a price lower than $1.

Finally, other strategies that may be reflected on are promotional and premium pricing. Promotional pricing will involve use of discounts and offering free samples – one is provided with a given product for free if one buys given bars of chocolate. Premium pricing, on the other hand, is charging a high price, especially for a product considered unique or luxurious (Marketing Teacher). For a premium strategy to be successful, (Turazashvili n.d.) has suggested, the company will have to use other sales promotional to create euphoric feelings in the consumer such that they may feel self-importance in the use of the product (p. 2).

References

Salgado-Beltram, L. & Subira-Molera, M. E. (2012) Relationship Between Sustainable

Buying Intention and Marketing Strategies, IJMSIT, Annual Meeting (18 – 30)

Turazashvili, N. (N.d.) Patchi: How Marketing Made Ordinary Chocolate Luxury?

Retrieved August 23, 2016 from www.turiba.lv/f/studZinkonf_Nikoloz_Turazashvili.pdfabout using that product

Learnmarketing (N.d) The Marketing Mix (4P’S): Price and Pricing Strategies,

Retrieved August 23, 2016 from www.learnmarketing.net

___________ Pricing Strategies — Marketing Teacher. Retrieved August 22, 2016 from

www.marketingteacher.com/pricing-strategies