PRICING(marketing strategy) Let consumer
decide what to pay or let consumer decide the
price.
Ab das(INR 10) me Lux(Lux now only at INR 10), Maggie chota
pack sirf paanch rupay(INR 5) ka only(Small pack of Maggie now
at INR 5 only). Fore mentioned are couple of example of price
emphasized marketing strategy used by major FMCG. These
examples display the need or essence of pricing involved in
marketing of a product.
Launching a product in the market needs a lot of effort as there is
competition by many players, players with deep pockets which
drive market. In a probabilistic market, there is a huge chance
that product may loose its market or it may dont even find any
ground and end up exiting from market. So, to make difference,
either your product should be innovative which has no alternative
or pricing should be competitive with prominent quality. Product
might also come up with differentiation, for example, FOG
deodorant came up with product differentiation mocked the
market and shocked the existing players.
For many products that comes in the market have an alternative
and have to face existing competition, hence pricing plays an
important role in competitive world. It acts as an strategic move
in tough economic conditions and in new venture situation where
the fight is on price to earn market share.
Pricing strategy, in every organization, faces a lot of questionsWhat should be our pricing strategy for this market? What should
be the criteria to measure effective strategy? How the strategy
varies? Why, after doing their best, many companies fail to
effectively implement it? What is the impact of industry on
pricing? Is there a relationship between pricing and brand of the
organization?
This article would present an approach to these questions. The
effective pricing strategy should be focused to earn maximise
profit meanwhile increasing market share. The way one should
start and then accelerate.
Every product that launches in the market starts with market
analysis, market research and then further developed keeping the
target market. Understanding the product need is the effective
tool to decide price. One can raise profit from the need but the
question comes that how one can relate need and price as there
is no effective tool to measure accurate need.
We dont have the tool but we can perform an experiment to
relate price with need. The terra bite lounge, a coffee lounge
started in Boston illustrates the example where the customers
were empowered. They were offered to pay what they want for
coffee and associated services and pay the price what they feel is
apposite. Although tera bite lounge was used to sale the product
but one can used it to decide the price of the product. Giving
customers opportunity to pay what they feel could be the best
strategy because in this way we can identify the approach
customers uses to make the price assumption. Customers
approximation about the price will vary but one should need to
track the customers whom they are targeting and ensure that the
price they are willing to pay covers the cost of the product
otherwise one should increase the quality.
Customers take quality of the product as an important factor but
one should remember that price does not depend only on quality.
Factors like environment, placement of product, packaging,
perception in the mind of customers and association with product
decides the pricing. Offering associated with product will also help
to increase the price but sometimes it was granted as a free
offering thus should be critical dealt according to the target one is
aiming. The critical points we need to focus while implementing
this price deciding strategy are-
The product price estimation by different customers should
be hidden as openness will lead influential pricing.
Environment, packaging, perception, and association are
critical.
Changes should be done in these factors to minimize the gap
between the price estimated by the customer and what one
is aiming to achieve.
Offering should be effectively associated without the product
to get the maximum profit.
Average pricing of each day should be noted to estimate the
final price.
This can be used as a strategy to decide the critical issue of
pricing and the best thing about this strategy its consumer
decided pricing vis--vis it acts as an differentiated product in the
market. When people are empowered by pay their way they will
definitely try to outreach the product. Another aspect of this
strategy will save money used in promotion of product as pay
what you want campaign will automatically create a huge
awareness in the market and will generate huge customers base
as per the product.
#comnsumerempowered
