Pricing Strategy For A Product

The three main competitive strategies are cost leadership, differentiation, and price strategy. Cost leadership focuses on acquiring raw material of the highest quality at the lowest price. In return this company can lower production cost with the goal of being the company with the lowest production cost in the industry. Differentiation strategies allow companies to make their products stand out from the others. Differentiation can be actual or perceived. Actual differentiation occurs when the company creates products that are not available elsewhere. Perceived differentiation takes a lot of marketing and advertisement to convince the consumer that this company’s product is superior. Price strategy includes a variety of strategies that cause a particular product to be marketed at the lowest price possible. Price strategy includes skimming where companies set a high initial price only to turn around and lower it. Bundle pricing occurs when several products are offered for one price. Promotional pricing allows other incentives to buy such as buy one get one half off. Using the pricing strategies causes many consumers to actually purchase more believing that they are receiving a “deal” while the company is still profiting. Competitive strategies are always used by companies and are often used together. Companies that understand how to combine competitive strategies fare much

* Buyers try to switch cost because of the same product available at other retail stores.

The pricing strategy that I chose is marketing objectives. Our company will deliver on this strategy to this stand by competing with our competitor’s stand. Our competitor, Jimmy, manages the Lemonade Stand “Liquid Yellow” charges $1.50 for one cup of lemonade. However, they use artificial ingredients, such as artificial flavoring and coloring, white sugar, etc. My company decided that we want to have a price that is higher than Jim’s price. We decided that we want to charge $2.00 for a cup of lemonade. We decided to charge this price because unlike Jim’s stand, we use all natural ingredients, which cost more than artificial ingredients and are healthier for you than artificial ingredients are. That is my company’s pricing strategy.

Product retail pricing strategy is a major part of my role with the Dr. Pepper Snapple Group. We operate in a highly competitive beverage industry that is heavily dominated by two players; Coca Cola and Pepsi. Beyond the big three (DPSG, Pepsi, and Coke), there are numerous other competing brands and companies in multiple market segments all vying for the business of retailers and the consumption of consumers. Additionally, each retailer we come to business with implements their own retail strategies. Therefore, settling on a cooperative and mutually beneficial chain specific strategy can be a daunting task. Without really knowing it I have been evaluating the price elasticity of consumers throughout my entire beverage industry career. There

Pricing strategy can be defined as the strategy that aimed on finds the product best selling price to accomplish overall organizational objectives (Kurtz, 2012). Pricing strategic is directly related to product positioning. It is because the managers must consider how much the target market is willing to pay and cover back of the product cost. Therefore, Chatime has decided to lower its prices on milk tea to target on common people.

Knowing that consumers will shop for the best deals, differentiation will be introducing new pricing methods that attract the everyday shopper and not only the seasonal shopper.

This is important because it gives them price differentiation. Dollar General and Family Dollar prices vary according to the product. Similarly, Wal-Mart conveniently operates with low prices to cater its demographic, but it cannot operate in as many locations. . “If a firm has lower costs than its rivals, other things being equal, it will outperform them” (Satterwhite, 2006).

Wal-Mart’s winning strategy is to get their name out there as much as possible; for example, Wal-Mart has aimed to create an unfailing image of low prices for consumers every day. By continually emphasizing the concept of everyday low prices and never featuring “sales”, Wal-Mart has reduced its advertising costs. Most of the Wal-Mart stores sends out 13 circulars per year (a form of advertisement) while competitors sends out 53 or

The sampled excerpt is a good example of the strategy that Wal-Mart has incorporated in the past and will be relying on for the future. Wal-Mart is known to keep their prices low and consistent thus the customers are not surprised and know what to expect. They do not offer coupons or special promotions since they offer a everyday low price guarantee.

The big retail stores have the advantage of making the highest possible margin as they buy in bulk from the suppliers and hence they can afford to play with their prices.

As is known, pricing is one of the most important steps for business plan which needs good research, calculations and formulations. There are different pricing strategies to put into effect due to the market and product conditions, such as premium pricing, penetration pricing, economy pricing, price skimming(Voice Marketing, 2012). These four pricing strategies are main pricing policies. They form the bases for the exercise. However there are other important approaches to pricing. These pricing strategies are: Psychological pricing, product line

Based on these 6 factors in setting a price: selecting the pricing objective, determining demand, estimating costs, analyzing competitors costs, prices and offers, selecting a pricing method and selecting the final price, Singapore GP Pte Ltd employed 2 different pricing strategies. They are

Price interacts with all other elements of the marketing mix to determine the effectiveness of each and of the whole. The objectives that guide pricing strategy should be a subset of the objectives that guide overall marketing strategy. Thus, it is probably wrong to view price as an independent element of marketing strategy or to assert that price, by itself, is a central element in the marketing mix.” (Webster, 1979)

The company would employ varied marketing strategies that they will use for the next one and three years. One of them is the pricing strategy, which is one of the essential marketing elements. Bearden, Netemeyer and Haws, (2011, p.63) point out that pricing strategy is one of the vital element of competing with competitors favorably. This is through setting the prices of products differently in order to differentiate the price from that of the competitors. Many companies use pricing strategy in setting the price above or below the equilibrium level in the market. For instance, the

Price, which is one of the most important elements of the marketing mix, can be difficult to get right. Pricing too high, or low, can negatively impact on customer satisfaction and revenue. Adopting a pricing strategy is necessary to achieve desired sales objectives (Chan & Wong 2005).