Tide Marketing Case

The company must factor in that each of their customers has lifetime value, a greater value than a small gain made on first sales. With competition in their sector, more penetration pricing would be appropriate. The penetrating pricing strategy would only make sense to retain customers; the pricing strategy must realize lifetime value, (University of Phoenix, 2011).

This report will outline the Tide family of products produced by the Procter & Gamble, Co. by reviewing the history of the company and tide specifically while discussing areas of strength in the marketplace. First, the report will discuss the history of the Procter & Gamble Company, their corporate sales history, and stock price. Then the report reviews the Tide Family of Products history, marketing, and innovation. Next, the report will discuss the Tide retail distribution challenges, price points and designing for a target market, competitors, and their philanthropic mission.

Price skimming is a strategy which firms often using when starting enter into the market, which offers high price at the introductory stage of the production cycle and lowering the price when competitors have been attracted by the high profit margin to enter the market (Ma & Hernandez 2011).

This occurs when a business charges the highest price for a product during the introduction stage of its lifecycle. This is typically used when introducing a new, unchallenged product into the market, ensuring high profits before the product has competition. For example, Apple set its price for its iPhone 6 plus exceptionally high due to its advanced features and lack of competitors. This ensured that Apple received high-profit levels before the iPhone 6 plus was challenged by other products. Additionally, this has seen Apple have a high product position and helped cement its brand image, as these higher prices are typically associated with a higher quality product. This has subsequently improved market share and profits.

This is a strategy that can apply to products with consumable supplies. This is where the pricing at high prestige levels, otherwise they will not sell; customers equate higher quality with higher prices.

“Market penetration” is a relatively straightforward strategy, involving more sales of an existing product in an existing market. Existing customers need to be encouraged to buy more of the product or attract new customers. Businesses usually use different and effective promotional techniques or drop the prices to achieve this goal.

Will implement price penetration to gain the market share. Price penetration is where a business sets the price low with the goals of attracting customers and gaining market share. The price is raised once the market share is gained.

Competition within the industry as well as market supply and demand conditions set the price of products sold.

The price comes from how much the product should sell for. In considering prices, the organization should consider the "product, customers, competitiveness, and quality."(Purdue, 2007)

First of all, penetration pricing is the major determinant of the price and that is employed when the product managers have to give most of the value to the customers and keeps a small margin. Chatime decided use penetration pricing where set a lower price of milk tea than the eventual market price to attract

When trying to determine the correct price, a number of factors must be considered: the market and its segments, the size of each segment, the ability to reach each segment, what distribution channels to target, whether to vary price by segment, the usefulness of promotional offerings, and whether the goal is to skim or penetrate each market.

According to Vivian Guo (2012), Cost-plus pricing is the simplest and oldest method of determining price and provide the basis for doing business. For calculating this price we need add together the direct labour cost, direct material cost, selling and administrative costs, and overhead costs for a product. Then we need to add to it a markup percentage (AccountingTools, 2016). The pricing formula is:

The second pricing strategy is the penetration pricing where the product enters newly into the market. To gain some consumer base from the competitors, the seller initially charges a lower price than the competitors. For example the ticket prices initially charged for IPL, Indian Premier League, matches were lower than the ticket price of the competition ICL matches. On the contrary, price skimming strategy is to grab the financially top class of the market and to do this, the seller charges high prices. The effectiveness of this strategy is based upon

Promotional strategy can be described as the function of notifying, persuading, and influencing the decisions of a customer regarding a particular product and/or service. Notably, certain promotional strategies are geared towards creating primary demand or desire for a general product category. The most common objectives of the use of promotional strategies across organizations include creating the primary demand for a product, expanding markets, maintaining the current market position, and presenting a corporate view on a public matter. The other important aspect in the marketing mix is developing an appropriate pricing strategy for the product and/or service. The main objective a suitable pricing strategy is to ensure that the product and/or service are provided at reasonable prices while 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).