Pricing Strategies for branded products

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Pricing Strategies for branded products

In the marketing mix, price is one of the core elements, it is often viewed as the most difficult to implement effectively. This is mainly because the price a company pays for its services and products has a direct influence on the profits and bottom line revenue. However pricing is also an essential element of positioning a product in a market segment and strategic issue. In this understanding companies have to take into consideration how their implemented prices are affected or affect other elements in the marketing mix, their marketing strategy, and environmental factors. In addition how the enacted prices will affect how the variable and fixed costs will change with time, how it will influence demand and the company’s overall strategic goal. In this manner the pricing issue affects the business regardless if it is maximized in terms of revenue, profit, or growth, only after meeting these terms can a structure and pricing method truly be determined and implemented effectively.

Part of the marketing mix must first consider marketing since the products ultimate product price is often determined by its quality and this makes price have a direct and curtail impact on the products success. The price demand impact on quality is critical to the product, depending on the company’s aim of wanting to maximize its profits or revenue. Finally the company has to consider the regulatory and competitive environment in which it wants to operate in the same context as the price. The company can spark a price war if it sets a price much lower than the rest in the market and this may cause harm to the market, On the other hand prices that are too high may cause the customers to divert to competition products which may be cheaper (Ed Wesemann, 2007).

There may be a restriction to the price levels by implementing the regulatory guidelines which help in preventing predatory pricing use by companies since it means establishing extremely low prices in order to maintain a monopoly while driving out the competition. When companies need to establish different customer group prices they need to be careful, as this may be viewed as a coalition with their competitors to regulate the prices or they could also be viewed as discriminating.

With this above understanding this article seeks to address the most appropriate pricing strategies that would be appropriate for frozen vegetables, and media distribution of branded products while also analyzing the difference in the strategies.

Frozen vegetable products

One of the most appropriate strategies for pricing would be the implementation of competitive pricing since it would effectively help market the frozen vegetable products since many of the customers would prefer the low or average prices. Psychological pricing strategy would also be effective in selling and establishing appropriate prices for the products, its implementation is however hard since it mainly revolves on factors like the capitalizing on the consumers expectation that they will not take into consideration the minor digits in the price which they consider not significant, and focus instead on the dollars instead of the cents and the consumers perception of the fractional prices which have been purposely set at low prices.

Strategies like value pricing can also be implemented to facilitate the frozen vegetable prices; however this method can only be effective if an external factor like increased competition or recession force companies to provide value services and products as a means of maintaining their sales example is on the Wal-Mart stores that have to maintain their prices and products value as a means of staying in business which in turn make the customers value their products since they are quality while costing less.

In markets that have high competition for the same product an effective strategy would be a competitor based pricing since, the customer will be spoilt on choice on where to buy from. This will dictate that they be mindful of a normal and reasonable market price even if they buy from the cheapest provider. In this aspect attracting the customer through flexible prices would be influential on their purchasing the frozen vegetable products.

Media Distributor

An effective strategy for media distribution would include the application of dynamic pricing which would involve a flexible mechanism for pricing that is supported by information technology advancement.by responding to the customers large amounts of data and the market fluctuations ranging from how much they spent on previous purchases, where they live, and what to buy, the application of dynamic pricing can help the company to relate to their customers by effectively adjusting their prices to suit the customers, and this will be an effective way to sell media products like cable television.

Penetration strategies for pricing can also be implemented by the companies as they venture into new markets both locally and internationally, however the down side of this strategy is that it requires the business to be self-sufficient in that it can support itself during the process since it needs the company to set for the products very low entry prices to make an impact in the highly competitive markets (Ellickson and Misra, 2009).Economy pricing is also effective in distribution and marketing of media related products in this strategy a company can take a low-cost and basic approach on their prices and marketing in that they mainly focus on the bare minimum requirements to facilitate the attraction of specific target groups and keep the production cost low which is not only price sensitive but also effective.

During the early stages of the product’s life cycle implementing premium pricing would be ideal since it would help in the company maximizing its revenue profits in the market, this is effective since their products still have high demand and the premium pricing establishes prices higher compared to the competitors.

Difference between the strategies

The major difference is in the divergent application of the price strategies which through the long-term mediums can be adopted to gain the overall objectives of the marketing even though they have effective and significant marketing strategies.

Another difference in the pricing is that they are mostly affected by the composition and size of the markets since they impact the pricing decisions as they centralize on the review of the appropriate potential markets in regards to the products. This means that the constant shift in the market sizes and prices can make the implemented strategies not be effective.

The tactics that are employed in the strategies all tend to have short runs since they all apply differently to the situations. The business strategic pricing also have constraints on the business positions. The strategies are often easily influenced by the various market positions that can be taken by a business mainly as price leaders, price takers, price makers, price followers and price leaders

In conclusion having prior knowledge on the various pricing strategies will be efficient for the company pricing managers and through recognizing the products life cycle it can be used as an effective tool, in that by the sales team recognizing and being in the same page on the utilized pricing strategy and product life cycle the company can will likely be able to see greater return on their products.

Reference

Ed Wesemann, (2007) STRATEGIC PRICING Edge International. Print

Retrieved from

edwesemann.com/wp-content/uploads/2012/04/Strategic-Pricing.pdf

Ellickson and Misra (2009) Supermarket Pricing Strategies, Marketing Science, Informs .print

Retrieved from

http://paulellickson.com/SMpricing.pdf