Glitzz: Devising a Pricing Strategy

2012 Words Mar 5th, 2013 9 Pages
08
Fall

Marketing Individual Assignment 5
08
Fall

Marketing Individual Assignment 5
Glitzz: Devising a Pricing Strategy

1. What factors influence the pricing decisions for a product such as Glitzz? Analyze these factors and comment on the range of prices that can be set for Glitzz.

Price is the amount of money given in exchange for the ownership or use of a good or service. Firms, like Glitzz need to consider the amount of money that consumers are willing to give up in exchange for their products.
In making pricing decisions, firms, like Glitzz must first consider a few factors:

Company Factors
Pricing Objectives
Pricing Objectives involve specifying the role of price in an organization’s marketing and strategic plans. These
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* Competitors’ Prices
Considering only the direct substitute products (i.e. Brilliant Restorer and Connoisseurs) in the market, the price of Brilliant Restorer was not stated. Hence, the only price that can be compared with would be the price range of Connoisseurs, between $14.00 and $16.90.

Consumer Factors

Demand

* Availability of Substitutes
Glitzz faces direct competition of similar products from a few sellers, namely Brilliant Restorer and Connoisseurs.

Brilliant Restorer bears the most similarities to Glitzz and both cleansers come in the form of sprays. Connoisseurs differ in the method of application, as it comes in the form of a brush and tray.
Powervescent is not considered as a direct existing competitor in the market as its shop is yet to be set up. In addition, it intends to sell via its future e shop, which targets a different consumer group as Glitzz.
At the current stage, the jewelry cleaning machines also target a different consumer group, as compared to Glitzz.
Hence, Glitzz should focus on capturing customers from Brilliant Restorer and Connoisseurs, using them as a benchmark for price and product features.

Price Elasticity of Demand (Ep)
Price Elasticity of Demand is the percentage change in quantity demanded relative to a percentage change in price.

Ep = Percentage change in quantity demanded / Percentage change in price
However, as Glitzz is still a new

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