...service is a luxury exclusive service and pricing it high will help imprint that style image into the consumers mind. Many people believe you get what you pay for. A market research team will verify this willingness to pay a high price and thus support the demand curve. In the interest of being practical, variable and fixed costs need to be carefully calculated. A products price must cover cost plus yield a fair profit. In these figures, distribution and promotion decisions must be weighed. DirecTV should anticipate that the demand curve for a technological savy luxury electronic item will be inelastic. Maximizing profit margin should be DirecTV’s goal and realizing that the higher price may drive some consumers out of the market. The high price will still signal high quality and again will feed into the luxury positioning. For new luxury products with a select target group of households with abundant disposable income a good practice to maximize profit margin with skim pricing. This is especially effective when demand is expected to be relatively inelastic. Our target market, technologically savy upper class with disposable income, does not tend to be price sensitive. The plan is to skim the cream off the top. As the product life cycle progresses, there will be likely be changes in the demand curve and cost. At this time, the pricing policy will be re-evaluated. Although skimming is the basic component of the pricing strategy, there are...
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...Up In the Mix: The Four P’s Abstract Marketing is an integral part of the success of any business. The “Marketing Mix,” otherwise called the “Four P’s” include Product, Price, Place, and Promotion, and outline the fundamental requirements for a business to produce revenue. Firstly, a business needs to have a product, good or service from which to build their company. Secondly, the product has to be reasonably priced and be of lasting quality or value to the consumer for the business to be able to make profits and continue to flourish. Thirdly, products need to be made readily available to consumers and needs to be affectively distributed to meet the demands of the consumer. Lastly, the consumer needs to be made aware of a product or service through promotion. In utilizing the Four P’s, businesses have the fundamental tools to grow a successful company, as is the case with the Unilever subsidiary, Dove. Up In the Mix: The Four P’s Over the course of history the needs of consumers has grown. In an expanding market with growing competition individuals are presented with many companies from which to choose to purchase their various goods and services. In starting any business the basic goals are eventual profit and customer satisfaction. There are essential tools utilized by companies to gain and retain the business of the consumer. These essential tools are part of the “Marketing Mix” and are referred to as the “Four P’s.” The Four P’s include Product, Price, Place...
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...organization. Pricing is more than a number on a tag and has many components. Pricing decisions, strategies are complex and involve the decision makers to consider many elements such as the company’s positioning, the company’s brand, the customers, the competition and the marketing environment (Kotler & Keller, 2012). Companies use many methods to determine the prices for products that will generate better revenue. The owner or boss of a small business will often be the ones that determine the pricing strategy but in a big corporation, the pricing strategy will be established by the top management. The divisional, product and line managers of the big corporation use the pricing strategy policies and objectives approved by the top-management team (Kotler & Keller, 2012). Lipman Bottle Company is a bottle distributing company that offers bottle label printing solutions to their customers. Lipman Bottle Company launched its operation in 1909 and had become the leading bottle distribution company in Albany (Anthony, Hawkins, & Merchant, 2011). Over the past two the use of plastic has increased because of its use in manufacturing bottle caps, lids, spray pumps and also because distributors had the technology that allowed them to print directly labels onto bottles, making it convenient and more cost effective for users to purchase both solutions from one vendor. In November 1982, Robert Lipman the vice president of Lipman Bottle Company wanted to develop a pricing strategy that...
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...promotions. This issue that JCP is running into is price is not a way to create value, it is a strategy to capture value. A company strategy that is focused on price neglects the value creating elements of the marketing mix that really create long-term value and success of the overall strategy. Neglecting to conduct market research to assess customers’ current perception of JCP and their thoughts on the pricing change was the first critical mistake. In terms of performance, JCP knows they are positioned between price-oriented mass merchandisers, such as Wal-Mart and Target and higher end department stores like Macy’s and Nordstrom. However,...
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...lotions Determine and discuss a pricing strategy (Penetration or Skimming). Imagine how many people in the world today are actively seeking organic body lotions. Especially when you can get it for $12 in an 8 fl.oz jar. Penetration pricing is a strategy employed by businesses introducing new goods or services into the marketplace. With this policy, the initial price of the good or service is set relatively low in hopes of "penetrating" into the marketplace quickly and securing significant market share. This pricing approach often is used for products that are of good quality, but do not stand out as greatly better than competing products. This would be the best pricing strategy for the organic body lotions because a penetration pricing strategy tries to sell the whole market at one low price. Such an approach might be wise when the 'elite' market—those willing to pay a high price—is small. This is the case when the whole demand curve for the product is fairly elastic. A penetration policy is even more attractive if selling larger quantities results in lower costs because of economies of scale. Penetration pricing may be wise if the company expects strong competition very soon after introduction. Once the product has secured a desired market share, its producers can then review business conditions and decide whether to gradually increase the price. Determine and discuss pricing tactics (Product line pricing, Value pricing, Differential pricing, or Competing against private brands)...
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...ONUR TAMUR PRICING WHEN ENTERING A NEW MARKET IN B2B ENVIROMENT: Understanding the B2B Dynamics Seminar Report ii ABSTRACT With the rise of globalization and saturated local markets, many companies started chasing international opportunities that would help them expand to new countries and increase their brand recognition around the globe. One of the challenges that companies face while entering a new market is defining the right price and pricing of their offering to be competitive and successful in the market. In B2B area, there are not any wide research on pricing issues that companies face in the markets that they are planning to enter and the effects of business relations on pricing. This paper focuses on market entry strategies and market entry modes, the fundamentals of pricing in a new market and the differences of B2B and B2C pricing. The study covers market entry modes and its impact on profitability, value creation in B2B area and the key aspects of pricing behaviour while entering a new market. This study in general provides a framework for implementing the right pricing strategy while entering new markets and defining the right pricing behaviour in B2B environment. This framework enables companies to understand the dynamics of B2B environment covering buyer-supplier and distributors relations and providing pricing models for companies to be a competitive player. Tamur, O. iii PREFACE This paper discusses the concepts of pricing and pricing behaviour...
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...PROGRAMME STRUCTURE FOR ISBE (PG) |S No |Subject |Credit | |1. |Business Statistics |3 | |2. |Operations & Optimization Research |3 | |3. |Economics for Managerial Decision Making – II |2 | |4. |Management Information System & KM |2 | |5. |Human Resource Management |2 | |6. |Financial Management |2 | |7. |Executive Communication |6 | |8. |National Economic Planning – I (Presentation Only) |2 | |9. |National Economic Planning - II |2 | BUSINESS STATISTICS (As per University...
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...Subject Code: IMT-17 Subject Name : INTERNATIONAL Notes: a. b. c. d. Write answers in your own words as far as possible and refrain from copying from the text books/handouts. Answers of Ist Set (Part-A), IInd Set (Part-B), IIIrd Set (Part – C) and Set-IV (Case Study) must be sent together. Mail the answer sheets alongwith the copy of assignments for evaluation & return. Only hand written assignments shall be accepted. 5 Questions, each question carries 1 marks. 5 Questions, each question carries 1 marks. 5 Questions, each question carries 1 marks. Confine your answers to 150 to 200 Words. Two Case Studies : 5 Marks. Each case study carries 2.5 marks. MARKETING A. First Set of Assignments: B. Second Set of Assignments: C. Third Set of Assignments: D. Forth Set of Assignments: Objective: 1. To give an overview of the scenario on international marketing which offer unlimited opportunities to the organization 2. To equip students with the understanding of environments with capability to develop products and other marking mix elements to develop effective market plan. 3. To imbibe an outlook to win world markets Contents GLOBALIZATION: THOUGHTS AND PROCESS For and Against Globalization; Determinants of Global Trade; Global Trade Dynamics; Global Trade and Economy Flows During -; International Competition; Outgrowth of New Markets; Defining Concepts of Global Trade; Drivers of Globalization;Organizing Global Marketing; Global Local Marketing; Objectives of Global Marketing...
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...White Paper Rate Optimization: Enhancing Your Hotel’s Pricing Strategy For many hotels, developing effective pricing strategies remains a complex issue for revenue managers. Their goal, ultimately, is to maximize companywide revenue and profits while building strong hotel partner relationships within their marketplace. The emergence of rate optimization has made strides to demystify pricing practices and help revenue managers understand the demand characteristics of their products, understand the price sensitivity of demand and design a rate spectrum that is tuned to all these. This allows hoteliers to take full advantage of their business opportunities, ensuring that they are capturing the maximum revenue at all times through an optimized rate spectrum. Beyond the scope of regular revenue management practices such as selecting the correct overbooking, rate restrictions and best available rate, lies the challenge of selecting the correct rates to choose from in the first place. Rate Optimization is the practice of selecting the rates offered in a rate spectrum based on the historical price sensitivity of demand. The goal of rate optimization is to understand the demand characteristics of products and the price sensitivity of demand and define a rate spectrum that will capture the maximum revenue over time. Dr. Ravi Mehrotra President, IDeaS Revenue Optimization Price Sensitivity, or Elasticity of Demand The Price Sensitivity of Demand is a measure of the change in...
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...International Marketing International Marketing Lesson 5 Dr. David Ambaye Lesson outline International pricing decisions International distribution decisions International Marketing - ESC 1 3 The 4Ps of Marketing «Meeting consumers’ needs» MIX PRODUIT PRODUCT Variety Quality Options and features Design, style Brand Packaging Size Guarantee After sales service PRIX PRICE Fees (margins) Discounts Sales Terms of payment Credit terms COMMUNICATION PROMOTION Advertising Sales force Sales promotion Public relations Direct mail Direct Marketing DISTRIBUTION PLACE Distribution channels Sales outliets Stock keeping Warehousing Means of transport Target Market © Dr. David Ambaye I. International pricing decisions Price: • the only element of the marketing mix that produces revenue, the other elements produce costs • communicates to the market the company’s intended value positioning of its product or brand Prices are perhaps the easiest element of the marketing program to adjust; product features, channels, and even communications take more time. International Marketing - ESC 1 5 Market Research What new products does the market need? Concept A new type of car Product development Development of the idea, design and key features within the manufacturing constraints Engineering/ Manufacturing Manufacturing tools and prototype created Test marketing Prototype tested with target...
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...r Case Analysis: Nor’easter First Season: Ticket Pricing Nor’easter’s first season will be very telling of the team’s future success in Springfield, Massachusetts. Costs for running the minor league program are expected to total 1.76M, meaning in order to break-even, Nor’easter must employ an optimal ticket pricing strategy that maximizes revenue opportunity and does not “leave any money on the table” (Cespedes, Winig & Lovelock, 2009). The main factors Nor’easter should take into account in establishing a pricing policy are (1) pricing objective, (2) consumer demand, (3) estimated costs, (4) competitor’s costs, prices and offers and (5) optimal pricing method. Nor’easter will employ a partial cost recovery pricing objective. In order to recover costs through concession revenue (an estimated 39% profit margin) (Cespedes, Winig & Lovelock, 2009) filling the maximum number of seats in the 3600 capacity stadium is imperative. Revenue from advertising and donations will also be a critical factor in cost recovery. Determining the demand of Nor’easter’s services cannot be underestimated. Survey results show 89% of respondents are willing to pay an average of $10 per game for 5 ticket packages, 68% are willing to pay an average of $10 per game for packages of 20 games and only 35% of respondents would be willing to pay $10 per game for the full 38 game season package. We can expect 78% of people are willing to attend roughly 12 games at a cost of $10 per ticket...
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...purchased then conclude if there is enough evidence of PD. Price discrimination is the practice of charging consumers different prices for the same good or service, whereby the relevant price in each case depends on the buyers characteristics. The most common form of PD would include grouping consumers based on certain attributes and charging these groups a different price. In pure price discrimination, the price of a good or service will be set at the maximum of which each consumer is willing to pay. The goal of PD is to gain an extra slice of untapped revenue source from consumers who are willing to pay a higher price and those consumers who are only willing to pay lower.[2] PD allows a firm to gain higher profits than standard pricing as some consumer surplus is changed to producer surplus. The conditions for price discrimination[3] include the ability for a firm to set prices; must have market power (this is the case for all non perfectly competitive markets), markets must be separate; consumers should...
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...STRATEGY 1 The planning process 1 Position analysis 2 Product Life Cycle 4 Internet strategy 6 Pricing 9 Mergers and acquisitions -- Strategic aspects 16 Strategy THE PLANNING PROCESS There are 2 theories about where the planning process should start: Accountancy led Where objectives are set independently of the environment - i.e. road works need to be done on the M5 at some stage, therefore we will do them even if it is the August Bank Holiday. This is often production rather than market led. Marketing led Where the starting point is reached only after the environment is well known. By knowing the market, planning ^ have a better basis. Prior to doing any planning we need to know: • Who we are: the Mission Statement and defining SBUs may help here • Where we are: where all the various position analysis tools can be used Alternatively, The Chaos Theory advocates assume that all planning is nonsense: no matter how much planning is done. something will go wrong. The Mission Statement To give direction during the planning process, an underlying mission statement is often used The mission statement, in simple terms, tells the world who we are and what we are striving to do. It can, therefore, be a motivational statement for the benefit of employees or a marketing...
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...Individual Case study A: 4 BMA258 Services Marketing 2015 Simon Martin 077915 Individual Case study A: 4 BMA258 Services Marketing 2015 Simon Martin 077915 Contents Introduction 1 Body 2 Conclusion 4 References 5 Introduction This report will provide information obtained through a case study, regarding the revenue management of gondolas. The report, will pay particular attention to the capacity of gondolas, revenue impacts, revenue maximisation and the difficulties whilst trying to balance heritage and culture, pricing structure, and will highlight recommendations and customer’s reactions. The report will contain definitions, strategies and theories gathered from relevant marketing texts. Body Case facts The case Revenue Management of Gondolas: Maintaining the Balance between Tradition and Revenue shows the history, importance, and role of the Gondola/Gondoliers in Venice. The key facts are there has been a heavy decline in the number of Gondolas from when they were initially produced and that demand of customers can be segmented into high and low seasons. The cultural background and strict regulations in Venice keep uniforms and boats traditionally designed. This also applies to the restriction of Gondoliers, requiring their birth to be in Venice. Many dilemmas are present including; capacity issues limiting their supply for market demand, and the pressure to maintain the tradition of Gondolas. Thus increase revenue difficult to achieve. In the past the core...
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...MKT10007 FUNDAMENTALS OF MARKETING ASSIGNMENT TEMPLATE Instructions for using this template: You can’t rely solely on this document when completing your assignment. You will need to also: * Check the Assessment Criteria / Breakdown of marks. * Study the learning materials closely. Make sure you apply what you learn to this report. * Search for good sources using the Library and cite them throughout the report to support your explanations. Before submitting your assignment * Delete this page * Delete all red text * Replace highlighted text with your own words Before submitting your assignment * Delete this page * Delete all red text * Replace highlighted text with your own words Notes: * It is not compulsory to use the format of this template – it is provided to help those who are new to this type of document. * This document is not intended to serve as an ideal format for all reports – always check specific assignment requirements. Include an assessment coversheet at the front of every assessment submitted. Please ensure that all sections are completed correctly before submission. | MKT10007 ASSIGNMENT COVER SHEET | DETAILS OF ASSIGNMENT | | STUDENT NAME: | ID: | | | UNIT CODE * NAME | MKT10007 Fundamentals of Marketing | ASSESSMENT TITLE /TOPIC | | TUTOR’S NAME: | | DATE OF SUBMISSION: | | | | DECLARATION | | Enter Y / N | I declare that:(the first four boxes must be completed...
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