3 pages/≈825 words
Business & Marketing
Pricing Strategies in marketing (Essay Sample)
What pricing and marketing (target market, product, place, and promotion) strategies should P&G follow? Defend your positions on why you selected the strategies you have chosen. The Situation To gain market share, P&G is lowering its prices. There are also a lot of conflicting signals as to whether or not consumers are willing to accept price levels that were in place prior to the current recession. What will the prices of P&G's products be in 6 months? Based on its current prices, 110% tells your reader that its prices will be 10% higher than its current prices and 90% tells your reader that its prices will be 10% lower than its corrent prices. P&G is also selling its products in its own stores AND selling its products to distributors and to retailers with whom P&G's stores compete. Submit your 3-4 page paper to Coursenet. Expectations In answering the question make reasonable assumptions, (clearly you won't have the same information available to you as P&G's VP of Marketing, e.g. about costs, but make some assumptions and follow through in your analysis). You should also bear in mind that a fundamental goal, as with all the cases you build in MKT501, is to demonstrate your learning. In preparing your CASE5, ensure that you demonstrate your learning of the marketing concepts and frameworks for analysis outlined in the modular learning objectives by using and referencing the background and case material. Explain the pricing strategies that firms use. Explain what factors are involved in the development of a pricing strategy. Explain the relationship between costs and prices. Explain the relationship between a firm's pricing strategy and its product, distribution, and promotion strategies In particular, in answering the question, ensure that you demonstrate your understanding of pricing, the factors affecting success of pricing, as well as your learning from previous modules. In particular, review what you learned about consumer behavior and bolster your argument in terms of when consumers make their decisons based on price, as opposed to brands and the locations of retailers. Pay special attention to P&G's pricing methods as you review P&G's pricing strategy as an intrinsic component of the marketing strategy for its products®. In terms of that marketing strategy, you should comment on P&G's target market(s) and how its products are differentiated from competitive products, whether it should be distributed more or less intensely than competitive products, and whether it should be promoted more or less intensely than competitvie products. Note that this assignment does NOT require you to prepare a detailed essay. Instead use section headings for each of the topics you address in your paper followed by a discussion of that topic. source..
PRICING STRATEGIES IN MARKETING P&G COMPANY
(06, September, 2010)
Pricing Strategies in marketing
The essay critically looks into pricing strategies in marketing employed by Procter & Gamble (P&G). Factors to be considered in the development of a pricing strategy, the relationship between costs and prices and the relationship between a firm's pricing strategy and its product, distribution, and promotion strategies are explained in this paper. Finally, the essay comments on P&G pricing strategies.
P&G company number one world maker of household products is constituted of health and well being, household care and beauty units.
According to Nagle & Holden (2002), pricing strategy refers to the plans or mechanisms used by companies in determining what a company will actually receive in exchange for its products and or services. With the realization that price manipulation of products can help organization cut it self an edge in this competitive business world, P&G in early 1990 changed its pricing and promotion strategies. It employed value pricing strategy in which it enhanced advertising, restricted its distribution channels deals and at the same time decreased its coupon promotions (Bollen & Greg, 2004).
Scott and Kyle (2010) in different materials identified the following pricing methods/strategies; competitive pricing which entails using the competitors’ prices as bench mark and the firm can set prices slightly lower, above or same as that of the competitor.
Cost-plus pricing, in this instead of looking at the market, prices is set on the basis of cost. Once the amount of profit one want has been decided, this is added to the cost resulting to selling price.
Valued based pricing is where by product prices are set on the basis of the value it creates to the customers. This is attained by charging on a varied scale according to the results obtained. It is deemed to be the most profitable if efficiently executed.
Psychological pricing concentrates with positioning, popular price points and fair pricing. It is helpful when targeting customers who will respond emotionally; for instance, setting price for a product at 0.99 cents instead of $1.
Target return pricing, firms set their prices in order to achieve a target return-on-investment. The amount invested is factored in determining product prices.
Factors considered in development of a pricing strategy
Pricing strategies when given same consideration as advertising or promotion and executed rationally can result to huge impacts on companies profits. According to Scott (2010), before choosing pricing strategies there are a number of factors that are of worth to note. These include, manufacturing cost, competition, market c...
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