Week 13: Possible Pricing Objectives

Price is one of the more important principles of marketing. Companies have a flexibility on how they can set their price. A price says a lot to the consumer about their product or service. Businesses should do a proper amount of research when setting their price. When setting your price, three pricing objectives strategies are followed. These are profit, sales and status-quo oriented pricing.

Image result for price

Profit-oriented pricing focuses on target return and maximizing profits. A target return objective sets a specific level of profit as an objective. These target return objectives are set by industry standards. Companies like Motorola, may have a 15 percent return on investment. Safeway and supermarkets might shoot for a 1 percent return on sales.

Sales-oriented pricing focuses unit sales growth and growth in market share. This does not refer to profit. This is a very popular pricing theory. Managers may believes that sales growth will lead to more profit. To increase unit sales, a company may lower prices to gain market share. Growing in market share can lead to companies operating at a more cost effective rate.

Image result for free shipping

Status quo-oriented pricing focuses on meeting competition and nonprice competition. Nonprice competition is a firm trying to distinguish themselves on the attributes of design. A company may do this with free shipping or using sponsorship deals. These firms set their own price instead of letting daily market forces decide their price.

Comments

Post a Comment

Popular posts from this blog

Week 14: Micro-marketing and Macro-marketing

Image
Determining how effective a marketing for an individual firm can be difficult. Companies may not have access to analytics and statistical feedback on marketing campaigns. So marketing campaigns are sometimes viewed as a micro-marketing or a macro-marketing. Micro-marketing are advertising efforts that are focused to a small group of consumers. This strategy has some drawbacks. Sometimes a lack of interest or understanding of the customer occurs. An improper blending of the four ps of marketing sometimes occur here. For example, the overhead cost to create a new product can be passed on to the consumer in a result of higher prices. The failure rate for these products are pretty high. Coca-cola attempted fuse soda and coffee together and it did not go well. Macro-marketing can be more effective. It can save in cost and be more efficient. If your product appeals to large groups of consumers, using strategies that large groups of consumers can relate to. For example, the cost to cr...
Read more

Week 2 - Marketing Strategy Jimmy John's

Image
According to data from the National Restaurant Association, the fast casual is forecasted to generate $246.7 billion in food and beverage sales in 2019. With many large competitors such as Panera, Chipotle and Panda Express, companies must differentiate their marketing tactics and come up with a unique marketing strategy. Jimmy John's has done just that. With unique commercials and casual  social media campaign, Jimmy John's marketing strategy is one of the most unique ones out there. Although TV advertising may have lost popularity in recent years, Jimmy John's has used the platform very effectively. Television commercials was a way to differentiate themselves from their competitors. The commercials often showed their "Freaky Fast" delivery services and their in store quick service. Jersey Mike's and Chipotle do not have the same reputation for funny commercials that Jimmy John's does. This has allowed them to create a cult-like following and a larg...
Read more

Week 11: Information Technology Used in Customer Relations/Services

Image
A business is responsible for many tasks. With the low overhead cost of technology, companies defer some simple customer service task to automation. Customer support, specific product design and step by step processes are used by businesses to increase employee efficiency and convenience to the customer. Customer support can be automated. Many different types of organizations from university libraries to large corporations use this method. These programs are designed to answer simple questions so the salaried salesperson can focus on higher end and specific customer questions. Product customization is a lucrative part of a business. Potential customers can design a company's product that a business can charge at a high margin. With the right software in place, you can custom design a Ford Mustang, put your number on new Nike shoes or many other cool features customers can enjoy. Many customers have negative opinions on your product because they may not be using the product i...
Read more