discussion 12
Pricing Strategies in Marketing
Duration: (19:35)
User: somasclasses – Added: 11/4/11
YouTube URL: http://www.youtube.com/
You’ve just developed a new product with little competition. What pricing strategy will you use?
Instructions: Answer questions and respond to Two of your peers’ post
Student 1/Regarding this lesson, the objective was to be able to explain the pricing’s role in the marketing mix. The marketing mix comprises of the 4 P’s, (Product, Price, Promotion, and Place). When acknowledging the 4P’s, our goal was to link marketing objectives to pricing objectives. We then needed to define the four primary strategies for both the concepts of For-Profit, and then Non-profit. In defining these, we then needed to define alternative pricing strategies. The last part was to categorize offerings into pricing strategies. In close relation to the graph, the information displayed economy, premium, penetration, and skimming. Economy involved low price, low quality, and volume. Premium included high price, high quality, profit, and image. Penetration included good quality, low price, and volume. And lastly, skimming involves good quality, high price, initial volume and profit. In relation to Non-profiting specifically, we find there are key attributes that are imperative to discuss and pay attention to. These attributes include: Market Incentive, public transit, cost recovery (full or partial), profit maximization, typically event specific, and it’s volume (fill seats). The video then lastly addressed the alternative pricing strategies that consisted of: Promotional, Geographical, and Value. In this sense we see that short term correlates with promotional, variations demand and operational costs correlates with geographical, and recession, and competition correlates with value.
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Student 2/After watching this video there are a few takeaways from that I have learned about pricing strategies. Of course I remember the marketing mix from previous chapters and pricing is a basic factor that determines the rest like promotion and place. In the video it discusses profit objective while setting pricing at maximum it can hurt them by not getting enough customers. On the other hand is companies use survival if the prices are always low how can the obtain a gross amount of profit. But if I have a product with little competition the best pricing strategy I believe to go with would be for profit and mostly using the volume strategy which consist of economy and penetration. When a product first comes out to test how well it can do using penetration method is good because it set for good quality at a low price. While this may be considered playing it safe this the best route not lose all money if the product does not work out. Another strategy that would work best for a new product would be promotional while much money cannot be achieved this way it allows for the product to be pushed out there and be noticed.
Solution Preview
Pricing strategy is the method used to price the goods and services by the companies. Product price is primarily set by considering production cost, labor and the expenses used during the advertisement. The value of the product is determined by market condition, competitor, and trade margin amongst others. Pricing in marketing is set to generate revenue.
Price can be kept low for a business to survive in the market; this price is set since the business is building name in the industry. Price is set to meet the objective of the business, the business can lower the price of the product with the objective to increase the volume of product sold in the market.
(432 words)