Marketing Strategy: Managing Pricing Strategy And Strategy

1120 Words5 Pages
Pricing Strategy The overall positioning of the company in a leading group, as quality supplier where value-for-money products meant that price levels, for business software segments, could never be reduced to a level which made them appear cheap. Even so, newly-introduced products, for this segments, had to be aggressively priced in order to gain penetration and win market share quickly. The pricing strategy for other segments need to be related to volume objectives and other factors which are described in following section. Managing Pricing Function Pricing decisions must be made in relation to other marketing strategy decisions. Price must be carefully measured with the product, distribution, and service strategies, including the…show more content…
If one of those elements is poorly executed, total offering is ineffective. The price setting must consider company's objectives, markets, costs, competition and customer demand patterns. Competitive and business climate change rapidly, customer requirements and perceptions change, and technology improves. That impose a lot of considerations, and one of them is pricing elasticity. Therefore, pricing is an ongoing, active process, rather than passive setting. Buyers buying a given level of product quality, technical service, and delivery reliability, considering, in selection process, the reputation of producer, a feeling of security, and other benefits flowing from buyer-seller relationship. Pricing decisions and product policy decisions are inseparable and must be balanced within market segmentation plan. Various market segments, each with unique needs, base their evaluation of a product on dimensions of particular value to them. The benefits of a particular product can be functional, operational, financial or personal. These benefits are of varying degrees of importance to various market segments. The decisions related to pricing process are multidimensional, and key components of process are: * Price objectives, * Demand…show more content…
The market is diverse and complex. Each market segment may represent a unique application for the product and a separate usage level. Therefore, potential demand, sensitivity to price, and potential profitability can vary across market segments. Pricing perspective also involves an analysis of the benefits and costs of the product from the customer's perspective. In calculating the benefits of a product, is necessary to examine the physical attributes of a product, and the attached services. This approach of examination of the product from the customer's perspective allows comparison with offering of competitors. Knowledge of the market is the key for pricing. A strong market focus, which examines how customers trade off benefits and costs in their decision making, establishes a base for assigning price. Costs establish the lowest pricing point, and they fluctuate with volume and vary over time. They must be considered in relation to demand, competition, and pricing objectives. Proper classification of costs is essential. Competition establishes an upper limit on price, and competitive level pricing is the most important pricing

More about Marketing Strategy: Managing Pricing Strategy And Strategy

Open Document