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Marketing mix - pricing
Transcript of Marketing mix - pricing
What can you remember about 'Product'?
The following 4 images are linked to 'Product'
write down what the link is and what are the features
of each element they represent The dog
Low share of a declining market; may be kept going because they complete a product line The cash cow
High share in a low growth market; any increase in sales will be at the expense of a competitor, low marketing costs, relatively high profits The rising star
High share of the growing market; high maintenance; maketing resources concentrated on this product so market share is maintained; fierce competition likely Problem child/question mark
A new product with a small share of a growing market: high maintenance; high levels of investment to become well established; high failure but potential long term pricing plans which take into account the objectives of the business and the value associated with it Pricing strategies Strategies for new products Price skimming
for products with little initial direct competition - often due to the products USP
launch price is high - product is bought by 'early adopters'
the profit margin is often high to recover R & D costs
at some point the price is lowered Penetration pricing
'low price' to encourage high volumes of purchase
used in a very competitive market where there is little product differentiation
typical in mass market products – chocolate bars, food stuffs, household goods, etc.
suitable for products with long anticipated life cycles
often supported by 'promotion' to encourage brand loyalty
example of this is 'introductory offer' Pricing strategies for existing products Price leaders
a product that has a significant share of the market and can influence the market price
used when a business has a very strong brand image and there is little difference between the products Price takers
A firm that sets its prices at the same or similar level to the market price
Businesses that are price takers will try and use other elements of the marketing mix to give them more freedom to price set Boots are price takers - as much of their market is dominated by the supermarkets. They use promotional techniques and high quality customer service to attract customers Pricing strategies
Existing BOGOF Write down as many types of promotional pricing as you can What is the difference between 'strategy' and 'tactic'? Pricing tactics These are short term pricing plans, designed to
increase market share or increase the sales of a
product range I will be able to:
understand the pricing strategies used by business
understand the pricing tactics used by business
analyse the factors influencing the way goods are priced