As we already are aware the Pricing strategy is one of the Marketing Mix’s “Four Ps” along with the Product, Promotion and Place strategy. In this article is described more specifically how different pricing policies are viewed from the customers as well as the considerations lying behind of a low price. Moreover, the article describes the association between each strategy with the pricing strategy and how the combination influence different outcomes.
To conclude, the article along with the illustration of those strategies makes a linkage between them and the Total Customer Value.
THE LEARNING LESSONS FROM THIS ARTICLE
1) Organizations should pay equal attention to both Four” P’s” strategies and do not focus solely in the pricing strategy, since all these components are of great value as long as the firm knows how to take advantage properly.
However, small/medium sized businesses mostly of the time relies on the pricing strategy as they think that price is the most significant point of reference of how customers and competitors view them in the market.
2) Firms should find such equilibrium in their pricing strategy, nor too high or nor too low. This price should reflect the value proposition of the firm, which should be consistent, and, therefore support its business model.
If a company places the price too high, automatically makes the product unaffordable for the majority of people, therefore luck potential for huge growth. On the other hand, if the price is too low, may attract customers but in a limit way, since a low priced product do not live room for potential development or to promote it in innovative ways and to expand its placement. As a consequence, once the firm enters into the competition, considers that the only way to win is entering the price war. For example if a company’s product is premium priced and the company’s…...