Disadvantages Of Pricing Strategy

I will then make sure I create value for each customer segment and create a pricing structure that will align price with the value delivered. On the other hand, most of the customers usually perceive that the higher the price charged, the higher the value is attached to the goods they purchase or services offered. This also becomes a cutting edge in determining the pricing strategy to use as I anticipate my clients to perceive what I offer them to be of a high value.

6) Pricing- Setting prices is a critical decision in implementing a retail strategy because prices are a critical component in customers’ perceived value. In setting prices, retailers consider the price sensitivity of customers in their target market, the cost of the merchandise and services offered competitive prices and legal restrictions.

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.

Pricing is important when marketing a product. The determining factor for the pricing is the material, time to make, amount spent on marketing and promotion of the product. The goal in providing such a product that is moderately

* Long term effects of its pricing strategy (the company may not be able to continue if such pricing structure remains)

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.

The best strategy for you will depend on your firm, your product and your market. Remember that you do not have to use just one of the strategies outlined above. Many firms, in fact, use more than one approach and arrive at a price that represents a reasonable compromise between each of these strategies.

Describe and give examples of some of the following types of pricing objectives: profit, market share, competitive effect, customer satisfaction, and image enhancements.

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

Quite often, consumers purchase goods and services based on their perceived need. Upon making the decision that a need is present and a solution is available consumers are more equipped to react to that need. Although previously perceived that consumers will normally accept prices as presented by suppliers that remains to not be the case. Consumers assess and process prices based on past purchases and other psychological process they went through previously such as persuasive marketing strategies, accessibility of the goods or services and possibly information gathered from prior purchasers of a product. There are countless options that are available to consumers. Consumers are then faced with the choice of choosing the product that best fulfills their need at that given point. Consumers who are knowledgeable regarding prices will be aware of the approximated price for products (Zhao, Zhao & Deng, 2015).

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

The pricing strategy of Tesco is being developed accordingly to Tesco’s business strategy meanwhile pricing strategy would contribute to Tesco’s competitive advantage. To be more specific, based on the marketing message saying “Low Prices Everyday”, Tesco’s pricing strategy was made. Moreover, Tesco’s aim is to have reduction in cost purchase and operational cost in economics scale (Research Methodology, 2014).

Pricing Strategy – Price leadership, charge premium prices and aim to deliver superior value-added services in all markets OR market response, setting prices independently in each country, according to customer usage patterns and competitive pressures.

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).