Marketing Strategy. 2 questions

1.The best pricing strategy is the one that satisfies a number of different variables and also meets the firm’s overall objectives. In determining price, a firm must consider things such as cost to produce the product, objectives, flexibility, competitive pressures, return on investment, market pressure level over product life, geographic terms, discounts, and allowances. A pricing method that works for a firm, may not necessarily work for another firm within the same industry.

Identify the eight stages in the process of establishing prices? In your own words, briefly explain each step.
For what types of products would penetration pricing be more effective?
Why should marketers be aware of competitive prices?
2.Compare and contrast the four major types of marketing channels for consumer products. Through which type of channel is each of the following products most likely to be distributed? Why?

Oreo cookies
Cook’s champagne
Sofas
Books
New Vehicles

Solution Preview

Question 1
a):
Price determination is an essential step for marketers in making decisions regarding the prices that customers will have to pay for a product both directly or indirectly. The process of price determination involves eight steps; the initial step is market segmentation where marketers observe the market opportunities based on the type of product, the costs of operation, the type of services, and the different kinds of customers. The second step involves demand estimation where marketers will forecast the demand of the product focusing on competition and sales forecast. Step three involves market share, and here, marketers scrutinize the market competition to determine the brand image and market share of their product. The forth step is market mix, and it involves a combined approach of all marketing elements including product, promotion, pricing, and distribution strategies.

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