CHAPTER 3 BEST PRACTICES developed. Some edible plants can be turned into different kinds of products.

And can
be used as a new drug or medicine. In using, Bait and Switch Tactics, Burger King
OFDIFFERENT COMPANIES ON Whopper serves the flame-grilled patties in their burgers that consumers loved. The
Burger King Whopper's false advertisement rapidly takes over the net when many
PRICING STRATEGY people noticed that the actual advertisement of the 'Whopper" does not look the same
as what the real product presents. Another example was Walmart. Year after year, the
"You Can Determine The Strength Of A Business Over Time By The Amount Of Agony Walmart heirs prove no one comes close to their brand of exploitation, which they
They Go Through In Raising Prices." – warren buffelt wrap in public relations fluff and deception. On January 13, 2018, with much fanfare,
Walmart announced it was raising its minimum starting wage to $11 an hour (from
Learning outcomes: At the end of the chapter, the student is expected to $10) and giving eligible…. workers a $1,000 bonus, tying its munificence to the recent
 Determine and explain different companies use a pricing strategy to Republican tax cut. They used bait and switch tactics not to give their employees
attract more customers and retain loyal consumers; additional incentive in doing their jobs but to increase competition with other
 Know and understand the ideas on best practices displayed by different companies utilizing increasing their employees' wages and luring more customers to
industries and how they respond to the needs and wants of the avail their items that are said to be on "sale" but originally are not.
customers;
 Identify and describe the benefits of using pricing strategies and how they In using BONUS PACK,
help the company to meet the expectations both of their internal and Unilever has adopted the strategy of Bonus Pack. The firm occasionally
external customers; uses sales promotions, such as discounts and product bundles. The promotion and
 Classify and explain the implication of the pricing strategy to augment the price element ensure the company's profitability. Unilever maintains a good market
company's needs in providing timely attractions for customers' awareness that addresses competition and other challenges in the global market. Unilever
and satisfaction;and . expands its consumer goods business over the years. Some customers are interested in
 Elaborate the impact of best practices to the stockholders and discounted price bundled promo at a very affordable price, whereas another segment
stakeholders in satisfying the customers' needs and wants in the product. is more concerned about the other factors, such as quality, value, and a very well-
known product. Consumer's perception of quality may be influenced not just by the
Introduction This chapter will discuss how different companies will adapt to the pricing affordable price but also by such factors as store reputation and good advertising.
strategy mentioned in the previous chapter. It will enhance readers' ability to grasp the BONUS Buy 2 get 1 FREE BUY 3, GET 1 NOW! GIZING DEALS AT THE LAZADA BIRTHDAY
knowledge in Pricing by identifying the strategy being practice by the different SA FREE MIVEA RONDE 100 FACIAL FOAM BIRTHDAY FESTIVAL
companies here and abroad.
In using BREAK-EVEN SALES,
In using the ABSORPTION COSTING AND TRANSPARENT PRICING, Unilever is a British-Dutch transnational consumer goods company co-
The selected firm is Bragg Live Foods and Heinz International both headquartered in London, United Kingdom, and Rotterdam, Netherlands. Its products
exercising the best practices regarding the operation both in production, pricing, and include food and beverages, cleaning agents, beauty products, and personal care
distribution. The following are the essential information regarding the two selected products. It is Europe's seventh most valuable company. This product contains the
distributing companies: The production and distribution of Apple Cider Vinegar have same intention for all the looks and smells good, which contain scents that gives
two leading companies. The first is the Bragg Live Foods and Heinz International. These freshness to the hair. Both HEAD AND SHOULDERS an CLEAR MEN offer same amount
two companies are well-known for their quality product as well as best pricing of selling price. All these two shampoos infuse for a brilliant clean and fresh hair. 20%
strategies making it the top distributor of the Apple Cider Vinegar worldwide. head& MORE CLEAR shoulders EAR In calculating Break-Even Sales, the World Balance
Bragg Live Foods is mainly centered on the production and distribution of WORLD BALANCE story began with one pair of shoes and a visionary family of
ACV while the Heinz International sells various food products and condiments. One of shoemakers in the 1980s. Now, the brand has grown into one of the leading retailers in
the best Philosophies of Bragg Live Foods is that "Your Health is your Wealth!" Leaving the country. For more than 40 years, World Balance has, and continues to, make
a great advertising influence to purchase decision tackling about the nutritional people, products, and lives better. The brand is all about offering a wide array of
benefits of the product from the very drop of the ACV. quality products and experiences the customers love. Whether it is for everyday wear,
While Heinz optimizes its distribution through its established branding work, or performance, World Balance provides value and comfort to our customers
which is famous all over the world. The price in the Philippines varies among different from different walks of life. CHG Global Inc. is the owner and distributor of the active-
stores, yet the price range for the regular apple cider varies within the price range of lifestyle brand, World Balance. World Balance has been one of the country's leading
Php 250-400 depending on the variants. The same goes to Heinz and Bragg, some brands of footwear since 1982. It has a wide range of footwear collection for men,
stores also added a promo package of an Apple Cider Vinegar together with a Healing ladies, and children. In many boutique stores in the leading malls and the leading
Clay for those customers that are looking for ACV to be used as a facial treatment. department stores nationwide. The company also carries and distributes various local
and international brands such as Base London, East Rock, 7soles, and Easy Soft.
In using ACCUMULATED PRODUCTION,
the cookies found in Nuvali, Santa Rosa Laguna is expensive compare to In using BROAD PRICE POLICY,
other places in the area. Aside from their bigger sizes, the cookies are very satisfying Apple's success has become a model for the business world, it attracted
because of its taste and quality. The prices of cookies are affordable in Poblacion, Santa much attention of the business community, At the same time there are a lot of people
Rosa Laguna because the cost of production is lower due to the accessibility of raw have started to explore Apple's success and try to learn it. Base on the research, we
materials in the area. In using, Activity-Based Cost Accounting PUREGOLD is a company understood that the success of Apple has been supported by a lot of factors, which
that analyzes it, competitors, when they tend to feel that their sales are getting low, include Apple's unique creativity, hunger marketing strategy, Apple's amazing
they always try to compete among the other supermarket or same firm they are with. teamwork, etc., but never forget, Apple's pricing strategy is also important factor.
A price war is mostly a famous way of dealing with competition. This kind of firm uses Apple is persisting in the skimming pricing strategy; this is to set a high price for the
it when they notice that the other gain more profit or sales than them. They offer price product to grab the maximum profit in the short term as the goal rather than to get
discounts in their market. They also think of a strategy on how they can win over their the maximum sales. Focus on the Apple, before each generation of new products come
competitors and rename it with their company name. In using, Alliance Pricing out, they had already stirred up the consumers' psychology infinite curiosity and
Strategy, Apple Pay and MasterCard are one of those successful companies that use expectations, then when a new product start sale in the market, it's quite a high price
alliance strategy effectively. Apple Pay and MasterCard are competing with each other. makes a lot of consumers stay away. However, despite its relatively high price, it has
Apple collaborated with the second- largest credit card provider in the world, still not reduced its sales, instead, it is more robust the high-end image of Apple in the
MasterCard, to gain credibility in the merchant services and processing arena. While minds of consumers, and get a magnificent sale in the market, at meanwhile bring a lot
Apple Pay gets the benefit of MasterCard's reputation, MasterCard gets the cache of of loyal customers. However, just at the time the sales are still running well, and the
being the first to be an Apple Pay authorized option. The experience of MasterCard market has not saturated, Apple has started to develop the latest generation of
helps Apple as it works out potential bugs and issues as Apple Pay becomes more products, the old products begin to reduce the price. As a result, before the latest
prevalent. Those in similar areas do have the opportunity to benefit from each other. product is not yet available, the current product has become hot products, market
Think about a mortgage lender and a real estate agent. These are often considered to coverage has reached a considerable height, it opened a broader market for the
be power partnerships. However, there is usually some disparity as one may have advent of new products. In the latest product comes out, their price is even higher
more power partners than another, therefore the relationship is not exclusive. After than the previous generation, but its sales are still good. That is why Apple's skimming
testing partnerships, a real estate company might decide to bring a mortgage pricing strategy can obtain a good result. There are several reasons why Apple is
brokerage as a subsidiary in building a bigger company with all-inclusive resources. adopting the skimming pricing strategy. 1. High price = High profit. Development of
new products at higher prices, it can get profit as large as possible in certain sales,
In using the concept of ANALYZING COMPETITORS COSTS, PRICES, AND conducive to get a rapid return on the initial investment of new products and to
OFFERS provide capital to further expand the scale. 2. High price base on the product
Kowloon House pioneered in selling siopao creates a lot of competitors. positioning Apple's target market is the high-end consumer; thus, this market position
The taste and quality offer are not the same compare to their competitors. Some of is supported the product pricing. 3. Suppress competitors The new product priced
them tried to duplicate its taste and appearance. They offered reasonable prices and higher could prevent several new competitors from entering the market to a certain
good ambiance so that consumers can also be satisfied. While siopao along the street extent. 4. To meet the psychological needs of consumers Apple chose this pricing
is not expensive and has a cheaper price that can attract actual buyers of the product. strategy; its most fundamental essence lies in its consideration of the psychological
needs of consumers. So, Why Apple's pricing strategy can be a success. First, there is a
In using BPTO (BRAND PRICE TRADE-OFF), very strong brand to make support. Secondly, there are several customers with strong
Mango Juice made by Desika Foods Company used this strategy. The purchasing power and not sensitive to price. Moreover, the amazing speed of
innovation and business expertise in using mediciné to cure some diseases now can be replacement of the new products in the whole industry. To sum up, a good product
pricing will not only help to improve sales revenue but also help enterprises to
establish a good relationship with customers, however, to develop a good product In using CLEARANCE MARKDOWNS FOR FASHION MERCHANDISE ,
pricing is very difficult, if the companies make the slightest mistake, the improper markdowns are fervently used in the business industry, in this case, the
pricing phenomenon might occur. (Apple Skimming Pricing Strategy. (2016). fashion industry specifically. Here are those firms that also use this strategy: The
WordPress. Retrieved January 10, 2020, from: second firm example is Penshoppe, which used a combination of pricing strategies
https://mpk732t12016clusterb.wordpress.com/2016/05/01/apple-skimming- pricing- such as markdown and psychological pricing strategy. An example of this is a shirt that
strategy/) Sony has released the price of the new PlayStation 4 to be $399, looking at was originally at three hundred ninety-nine pesos then when it was marked down it
the price of the new PlayStation and comparing it to the ultimate competitor Microsoft became two hundred seventy-nine pesos SALE SALE only, the percentage range is
and their Xbox one is $499, Sony is planning to increase its market share by at least almost thirty percent of the apparel's original price. This markdown strategy is
10%. Sony market-based pricing is grounded on price skimming, this is the most seen effective for brands as Striped Top ₽309.00 F279,00 Cropped Top P300.00 ⑈279.09 big
with new and innovative products, such as mobile phones and game consoles. Tho as Penshoppe since this firm usually sells its product at a high price, customer easily
price is set high initially to gain those customers who will pay almost any price to have get attracted with a percentage markdown pricing strategy. BENCH The first firm that
the latest gadgets in their hands, once the business has profited from selling to those makes use of such a strategy is Bench stores; this firm usea percentage sales on their
customers. It drops the price to tempt other customers who may have been put off by clothing apparel, intimate wears, clothing garments, and fashion merchandises. It can
the high price originally. Sony is only able to do this because it is likely to be almost no be seen on the pictures below that they utilize th percentage markdown strategy.
competition in this market due to the cutting-edge nature of the product, this can be From a seven hundred ninety-nine and seventy-five cents, a sheer top became three
related to the play station 2 where it's being sold at a very cheap price of $80 from an hundred ninety-nine pesos only. The item was cut to a fifty percent mark downrange
original price of $250. Moreover, Sony and Microsoft use psychological pricing. where from the apparel's original price. As big and mass produced firms like Bench. It is an
they set prices at just under the currency unit, such as $399 rather than $400 this is effective and efficient way to gain customers since branded clothing is
based on different reasons such as $399 appears that it is offered at the lowest usually expensive; markdown prices make an item more reachable for
possible cost rather than being priced up to the nearest full currency unit. Moreover almost every working person with different income ranges. SALE SALE Striped Short
psychological pricing pushes products into cheaper price bands (Marketing: Sony and Sleeve Top Sheer Top Round Neck Tee P199.00 P69975 F399 00 1790.75 199.00
their Price Skimming Strategy. (2014). Blogs. Retrieved January 10, 2020, from 144925
https://blogs.ubc.ca/khalilwazir/2014/10/25/sony-and-their- price-skimming-strategy/)
In calculating Break-even For New Product, one of the companies that also uses In using COMPETITION-BASED PRICE STRATEGY,
Calculating Break-even is Nike. Last year I went to their store, then I see some of their Phoenix Petroleum Corp. and Chevron Philippines (Caltex). Their fuels are
products is a 10 to 20 percent discount. Nike's cost leadership generic strategy sustains the fastest-growing and leading independent oil company in the Philippines while
a competitive advantage based on cost. The company minimizes production costs to Chevron Philippines (Caltex) is a petroleum brand name of Chevron Corporation used
maximize profitability or reduce selling prices. In the late 1990's, Nike reduced costs in more than 60 countries in the Asia-Pacific region, the Middle East and Southern
and the selling prices of its athletic shoes and other products. Nike markets its Africa. Both Phoenix Petroleum and Chevron Philippines used Competition-based Price
products under its brand, as well as Nike Golf, Nike Pro, Nike+, Air Jordan, Nike Blazers, Strategy. PHOENIX CALTEX Phoenix Petroleum is one of the fastest-growing oil
Air Force 1, Nike Dunk, Air Max, Foam Site, Nike Skateboarding, Nike CR7, and companies in the Philippines. In 2018 it acquired a market share of 6.91%, putting it
subsidiaries including Brand Jordan, Hurley International, and Converse. within striking distance of the "Big 3" oil companies. The company was founded in
2002 by entrepreneur Dennis Uy with its headquarters located in Davao City. On July
In using CAPTIVE PRODUCT PRICING 11, 2007, Phoenix Petroleum listed on the Philippine Stock Exchange, becomes the first
is when the value of the main product is very low, but the value of the oil company to do so since the passage of the Oil Deregulation Law in 1998. The
supporting product, which is necessary for the working of the main product is high. My company grew from 1 to 300 service stations in its first ten years. Phoenix Petroleum
example for this is a company of EPSON printer, every time when buying a printer, also acquired a 60-hectare industrial park in Batangas which later came to be known as
there is a need for an ink. Retailers use several different strategies to come up with Phoenix Petroterminals od Industrial Park. This location services as the company's
their prices such as a combination of them (printer and ink). One of the strategies that largest terminal. Their drel products include Phoenix PULSE Technology and they have
they use is captive product pricing. This specific pricing strategy involves a retailer a wide selection lubricants and oils, including Phoenix Accelerate Fully Synthetic oil,
selling a base product for an inexpensive price or even giving it away for free. However, Phoenix ccelerate Monograde, and Phoneix Accelerate Multi-grade. Chevron
additional products are required to receive the full benefit of the item received. The Philippines the third-biggest oil company in the Philippines with a 2018 market share of
company loses a bit of money on the base product, but they make enough of a product -86%. Chevron markets Caltex fuels, lubricants, and other petroleum products. The
on the additional items to make up the difference. The captive products are the ompany has almost 700 service stations nationwide and 20 major supply facilities
additional items that the consumer purchases. Another example is the Gillette including their main supply hub which is located at their terminal in San Pascual,
Company is the world leader in the men's grooming product category as well as in Batangas. Chevron also provides fuel jet fuel for several airlines at Ninoy Aquino
certain women's grooming products. The Gillette Company is a globally focused International Airport and Mactan Cebu International Airport. Their fuel products
consumer products marketer that seeks competitive advantage in quality, value-added include Caltex with Techron gasoline, Caltex Diesel with Techron D, kerosene,
personal care, and personal use products. Gillette Company is one of the perfect lubricants, and fuel additives. They also have a full range of lubricants including
examples for captive product pricing, their product razors serve as the core product Havoline engine lubricants and coolants for passenger cars and motorcycles. Techron
while the blades are the captive product. The consumers of this product must always Concentrate Plus fuel additives and Delo diesel engine oils.
buy another set of blades after they used the old blades. They are obliged to buy
blades because the razor will not function without the blades this is the time where the In using COMPETITION-BASED PRICING,
consumers have to spend a lot of money were in the Razor Mach 3 or Mach 4 cost Coca-Cola is the brand with the highest brand equity. No doubt it has gone
almost equivalent to the captive items. The razor might be bought once a year, but the through the ups and downs of business to reach that position. The marketing mix of
blades have to be bought every quarter at the least. Canon Inc. is Japanese Coca-Cola has been changing over time with more and more products being added
multinational corporation specializing in the manufacture of imaging and optical such as today it has more than 3000 products. The company has the widest portfolio in
products, including cameras, camcorders, photocopiers, steppers, computer printers, the beverage industry comprising of 3300 products. Beverages are divided into diet
and medical equipment. The Canon printer is another example of applying the captive category, 100% fruit juices, fruit drinks, water, energy drinks, tea, and coffee, etc. As
product pricing. The printer is the core product, and the ink cartridge is the captive per Neilson's data, Coca-Cola in the no.1 brand retail packaged water in 2010. Coca-
product. Without the ink cartridge, the printer does not function. In this situation, the Cola has its market presence around 200 countries. Coca-Cola brands in India are
consumers will be forced or obliged to buy ink cartridge after they consumed it Fanta, Maaza, lime, Sprite, Thumps up, Minute Maid, Nimbu fresh, Nested iced tea,
because they cannot use their printer without the ink cartridge. The ink cartridge is etc. Due to the availability of a wide range of products, the pricing is done according to
more expensive than the printer. Lenovo Group Limited, often shortened to Lenovo, is the market and geographic segment. Each sub-brand of coca-cola has a different
a Chinese multinational technology company with headquarters in Beijing. It designs, pricing strategy. Their strategy is based on the competitor's pricing; Pepsi is one of the
develops, manufactures, and sells personal computers, tablet computers, most competitors to coke. The beverage market is said to be an oligopoly market
smartphones, workstations, servers, electronic storage devices, IT management means few sellers, large buyers. They form into a cartel contract to ensure a mutual
software, and smart television. Lenovo laptop is another example of captive product balance in pricing between the sellers. When one price a product as per the
pricing because the laptop itself is the core product and the software in the laptop is competition, then it is known as competitive pricing. Important criteria in customer
the captive product where the consumers of laptops must upgrade their outdated purchasing behavior are the price. Companies generally set the price by taking into
software. This is where the software is more expensive than the laptop itself. consideration competition, cost, and price sensitivity. To result in profitable and
sustainable business, managers have to set price so it covers the cost of production,
In using CHANNEL PRICING, cost of company overheads, and provides suitable profits. (Bhasin, H. (2019).
PJM Consulting company is a firm that Pricing software products. "Phil Marketing Mix of Coca-cola- Coca Cola Marketing Mix. Retrieved from
Morettini", the President of PJM Consulting Company stated that "Pricing software. https://www.marketing91.com/marketing-mix-coca-cola/)
With high product product is always a difficult exercise development costs, but very
low costs of goods sold, there are many different strategies that people have followed In using COMPLEMENTARY PRICING STRATEGY,
successfully and not successfully over time." He also stated that "Pricing hardware Gillette is one of the examples of the Complementary Pricing. Gillette
products is a bit simpler because there generally significant cost of goods sold that act made its main shaver's price as low as possible and made its complementary product
at least somewhat as a governor in market pricing behavior". But even with hardware, which is the blade high to cover up the profit. One of the characteristics of
technology markets are dynamic and fast-moving. Pricing is a complex enough topic Complementary Pricing Strategy is the added profit from the two different product
when all sales are going direct- one it brings channels into the picture, it only gets that compliments each other Colgate-Palmolive first introduces their toothpaste after
worse, today, we'll focus on channel strategy. the toothbrush. Colgate toothpaste got the attention of the people because most
dentists recommend it then that's the time where they also produced the
complementary product which is the toothbrush. Microsoft is another example of a
company that has used this strategy to its product Xbox and Its games. They have
increased their sales since the time they have released their first game Halo: Combat In using CUSTOMARY PRICING,
Evolved. Since then, they continuously released different games to provide the the Columbia's and Rebisco Candies are the pioneers and one of the most
demands of their market. COLGATE-PALMOLIVE popular candy makers in the Philippines. They sell their products per bundle for about
P20 to P30 inside of a bundle it contains 20 to 35 pieces of lollipops. Commonly in the
Philippines, there is a Sari-Sari store that sells those lollipops per piece for a P1.00,
In using COST-BASED PRICING STRATEGY, over the years this price has a little margin of increase or didn't even increase at all.
the pricing strategy of small businesses can ultimately determine fate. Even though the price of the sugar increases they still maintain the product's price to
Small business owners can ensure profitability and longevity by paying close attention what customers expect. Sometimes they reduce the size of the candies, reduce the
to their pricing strategy. Small businesses tend to use a cost-based pricing strategy pieces of lollipops inside the bundle, or use an alternative to sugar as a sweetener to
more than bigger businesses. Sari-Sari stores are a perfect example of it. These kinds of maintain the price point. Company Strategy - The companies use the same techniques
stores are home-based businesses so they do not need additional expenses for labor in minimizing the production cost of their product. First, if the price of sugar increases
and other expenditures more than their initial capital. The decision in manufacturing they use an alternative to their certain ingredient such as glucose-fructose syrup (GFS),
companies is primarily influenced by accounting data, to get a certain return on and high fructose corn syrup (HFCS) to maintain the production cost. Second, if the
investment or a certain markup costs. It uses the manufacturing costs of the product as price of other ingredients of the product increases they tend to reduce the size of their
its basis of coming to the final selling price of the product-either a fixed amount or a products to maintain the production cost.
percentage of the total product manufacturing cost is added as profit to the cost of the
product to arrive at its selling price. Using the cost-based pricing strategy can give In using CUSTOMER PERCEIVED VALUE PRICING,
manufacturing companies some advantages because cost-based pricing strategy is a My Lady Milk Tea is a well-known brand in the field of milk tea made
simple and straightforward strategy, it also ensures that all production and overhead landmark achievements and inspired by Korean Milk Tea. My Lady Milk Tea & Coffee
costs are covered before profits are calculated and lastly, it also allows the Shop has many variants and delicious flavors of milk tea that can satisfy your cravings.
manufacturer to consider how various levels of output can affect the product price. A trending iced drink made from tea, different kinds of flavorings, and small black balls
Also, the manufacturer can examine how various prices will affect the amount of of boiled tapioca, usually served sweetened and mixed with milk. These are the ways
output needed. they are doing the practices of selecting of pricing method is that every money of
customer is paid for their products and services has a very good quality and feeling of
In using COST-BASED PRICING, worth it, not only because of the taste of their milk tea is delicious but customers also
Retailer Everlane uses cost-plus pricing to make its value proposition of feel satisfied by their nice and welcoming way to treat and greet their customers. Their
"radical transparency" come alive. For every garment it sells Everlane provides a place is comfortable, clean and the ambiance is fantastic. . this milk tea is
detailed breakdown of costs for materials, labor, duties, and transport, along with its commendable by many milk tea lovers. They select the pricing method in terms of this
markup. This way, customers can easily verify Everlane's emphasis on paying fair wages company's core values. It helps in building the character of their employees. Their
to workers manufacturing its garments and actively endorse this company value by friendly staff interacts with customers on a personal level- always with a smile, respect
buying its products. Costco uses a final and significant virtue of cost-plus pricing that for others, and a welcoming attitude. They went through operational training and
lies in executing a "Cost leadership strategy". The company has unique competencies procedure supervision which assures exceptional customer service. They satisfy taste
that allow for an advantageous cost structure relative to competitors, uses cost-plus buds through its variety of unique, refreshing, and fresh- brewed drinks that will surely
pricing to create and deliver the most enticing value proposition of all. It becomes a be remembered by the customers and make them come back for more especially this
cost leader, and its low costs, the resultant low prices, and superior customer value product is originated here in the Philippines. Since this topic focuses on selecting of
become an integral part of its brand identity. Costco has maintained market leadership pricing method, Milk tea in these two milk tea shops to be the product, It is one of the
for decades by using this principle. The company mandates that nothing in its stores best-selling drinks nowadays especially for the teenagers or even the adults and kids
will be marked up by more than 14% 15% for its private-label products). It widely who love the sweet taste or to satisfy their cravings. Many companies are competing in
publicizes this pricing policy. When oupled with other cues such as a Spartan store the following areas: taste, quality, flavors, and even the ambiance.
environment, limited assortments, end bulk buying, its cost-plus pricing creates a
powerful image that the customer is going to get great deals at Costco. Dholakia, U. M. In using CUSTOMER SEGMENT PRICING,
(2018). When Cost-Plus Pricing Is a Good Idea. Retrieved from Sbarro's NYC one of the most expensive pizzeria stores. The mentioned
https://hbr.org/2018/07/when-cost-plus-pricing-is-a-good-idea.) 1. P&G and Unilever pizzeria is well known for its benchmark and originally crafted seven flavors of pizzas at
different low to lavish prices. To expound the pricing scheme of this shop, the bought a
In using COST ADVANTAGE, slice of New York Cheese Pizza at the price of P99.00 and New York Sausage Pizza at
HUL & P&G dominate the FMCG P&G market due to one reason - ₱145.00, both these are slices. But lately, in the year 2015, the Sbarro's resurrected
Economies of scale. These companies are very large and have a massive presence their ₱49.00 slice of pizza which nowadays are always sold out.
which results in them having lower costs. Lower costs of transportation and
distribution due to multiple products being distributed to the same retailer. Similarly In using CUSTOMER VALUE-BASED PRICING,
low costs of raw material because they buy and product in huge bulks. Due to the Starbucks is the master of employing value-based pricing to maximize
economies of scale and therefore the cost advantage, these two companies are ruling profits, and they use research and customer analysis to formulate targeted price
in the FMCG market. 2. Amazon Amazon has adopted the ed many different increases that capture the greatest amount consumers who are willing to pay without
technological methods to reduce cost. It has started using robots for its warehousing driving them off. Profit maximization is the process by which a company determines
purpose. This means higher work times at lower costs. Similarly, amazon they are the price and product output level that generates the most profit. While that may
coming up with various AI an algorithm which is helping the company with automation, seem obvious to anyone involved in running a business, it's rare to see companies
thereby reducing costs. 3. Airlines Another industry that is focused on cost is the using a value-based pricing approach to effectively uncover the maximum amount a
Airline industry. Across the globe, the brands winning major market share domestically customer base is willing to spend on their products. As such, let's take a look at how
are brands that have reduced their airline costs and hence are giving better prices to Starbucks introduces price hikes and see how it can use its approach to generate
customers. Such airlines are winning from the bigwigs of the industry which have a lot higher profits.
of bloat in their infrastructure.
In using DEALING WITH PERCEPTION OF FAIRNESS,
In using COST LEADERSHIP there is a principle called 'Dual Entitlement' where there is fairness if
involves gaining a competitive advantage by lowering the cost. Cost sellers pursue a pricing rule of raising prices when their costs increase, but not reduce
leadership is the main generic strategy that Tesco uses in various consumer markets. their prices when costs decrease. Also. this principle effectively implies that suppliers
Rebisco Clumbia SINCE 1937 TESCO How Tesco use a cost leadership strategy? 1. The are allowed to increase their profits when there are cost reductions. The buyer is only
primary objective of using this strategy is to preserve the market leadership position entitled to the current reference price and not to a share of the cost savings in the
through efficient value chain management. 2. This strategy allows Tesco to expand the form of a lower price. If businesses use this kind of pricing strategy, it is somewhat
market share by targeting the middle class, which makes the largest proportion of the unfair for the consumers who are just paying higher prices for the product they need
overall consumer market mix in most of the countries. Middle-class consumers or want. When it comes to dealing with the perception of fairness, sellers found either
generally place high importance on the pricing factor and cost leadership is the best in a wet or dry markets (palengke in Filipino language) are the best example. They are
strategy to cater to the needs of this consumer segment. 3. Tesco focuses on offering products such as seafood, meats, frozen goods, vegetables, and fruits. They
affordability and easy accessibility of its products across the globe, which leads can increase prices easily because of high demands and decrease in supply.
towards high brand awareness and high sales growth and provides a strong
competitive advantage basis 4. Other than charging low prices by lowering production In using DECEPTIVE REFERENCE PRICING,
cost and maximizing supply chain efficiency, Tesco frequently offers discounts and the following are the original order of the evaporated milk from its prices:
coupons to achieve sales targets and handle the competitive pressure by its closest first, Alpine Full Cream Evaporated (₱57.00); second, Alaska Evaporated (₱40.50);
rival. The intended outcome of these discount and promotional campaigns is to third, Carnation Evap Creamer (P37.50); fourth, Alaska Evaporada (P26.00); fifth, Jersey
increase brand popularity and encourage consumption. The discussion of Tesco's cost Culinary Milk Evaporated (P22.00); and sixth, Angel Evaporada (P21.00). The Carnation
leadership strategy has outlined many benefits offered by this generic strategy, such Evap Creamer and Alaska Evaporada is the only one that has "50 cents" and the rest is
as-gaining quick brand recognition, expanding the customer base, encouraging in the whole price. The thing is it is the strategy of Carnation Brand as its significance to
consumption, and achieving sales targets by emphasizing product's affordability and the rest of the evaporated milk. The Alpine Full Cream Evaporated is the reference
accessibility. Although, the analysis of Tesco Tesco's competitive advantage strategies price of the consumer in buying evaporated milk but when the sales price is there the
highlight cost leadership as the main strategy, the company also uses the consumer focus on the price down of the regular price and grabs the chance to
differentiation strategy along with cost leadership to set the basis for sustainable purchase a lot and neglects the other brand. Angel Evaporada has the same height as
competitive advantage in the intensely competitive global consumer market. another brand with 370ml that a buyer might not notice that it is only 365ml and think
of it as the cheapest brand with the same amount compared to other brands. Alaska a lower price point because seniors and children are likely to consume less food than
Evaporated and Angel Evaporada seems to be competitive at the pricing set since those in the age ranges in between.
Alaska Evaporated is sold for 2 pcs at its selling price is P76.00 whereas Angel
Evaporada is sold for 3pcs with the amount of ₱68.00. At first look you can save a lot In using DIAGNOSTIC PERCEPTION PRICING,
buying three pieces compare to the sales tag besides it and in the computation of its since diagnostic perception pricing has no firms related though, there's a
discount; you can save more and have more when you choose Alaska Evaporada's business that is likely to practice this pricing strategy. Printing Shop PRINTING SERVICES
promo. As I noticed there is no word in the middle of the two tags indicating "compare TARPAUIN PRINT TTERHE POSTERS XEROX BROCHURES GRAPH DIGITAL PRINTING
at" but automatically once a consumer looks at it, what comes out of his/her mindsets HOUSE CUT OUT 6HCKER SLICKERS WALL MURALS! VAN WRAP BUSINESS GARDS
a reference price which is the higher one. As a result, there will be a lot more demand Printing has become a lot more accessible to the general public in recent years, with
for the lower price and with a high margin. Without thinking of that if the consumer printing even possible directly from some modern smartphones. While home printing
bought Jersey Culinary Milk Evaporated that only cost P22.00 each as its original price may be adequate for personal use, it is a different ball game for people using printing
for three pieces it can be purchased for only P66.00. The idea in which they seem to services to market their business. Businesses will always require quality printing
get easily attracted to see sale prices and makes them think of the sale as sale and no products, as well as the expertise and advice that they can expect with doing business
longer deeply think how much they will really save compared to other existing with a professional print company. It has been suggested that the way tickets or
products that have lower prices and also offer high margin. invitations look might very well play a part in whether or not a person buys them. A
unique and dramatic looking invitation will get the attention of those who receive
In using DEMAND-BASED PRICE STRATEGY, them. This is especially important if it is an invitation to a charity fundraiser. Attractive
there are several examples of demand- based pricing that can be seen in a printing products always grab attention, which bodes well for a company, and this is
variety of products, companies, and industries. Disney Walt Disney World in Florida particularly the case with business publications and business cards. Cards printed on a
and Disneyland in California, which now increases their ticket prices during holidays quality paper creates good impression on those who receive them, whereas self-
and certain weekends, in contrast to times when there is less demand. In the U.S., printed cards can often look cheap and unprofessional, and make people wonder
other theme park operators have also embraced this type of pricing such as Universal about the quality of the products and services they will receive from the company. A
Studios. Besides, demand-based pricing is also utilized in the lodging, airline, and quality printed flyer will also help to attract more customers, and a professional
restaurant industries. LOS ANGELES, for the first time, tickets to Walt Disney World in printing company can advise on every aspect of the flyers, including design, typeface,
Florida and Disneyland in California will cost more during holidays and some illustrations, the color of type, type of paper best used, and even the color of the
weekends, up to 20 percent more than during slower periods, as the bursting-at-the- paper. A business will not get the same type of professional advice by looking at
seams parks seek to spread out demand. The Walt Disney Company unveiled its long- various websites for information. The concept of Print house grew out of a timeless
expected move to demand-based pricing in a blog post on Saturday. The seasonal love to carry one's uniqueness with which it reflects the dedication to preservation and
changes, which take effect on Sunday, affect the two-theme park resorts differently detail. The ink that delivers the ideas; the thoughts; the dreams into a magnificent
and apply only to single-day tickets and not the multiday packages that most showcase of artistic delight! and take you one more step towards success. They are the
vacationing families buy, particularly at Disney World. At Disneyland, located in pioneers in large scale UV printing on any flat surface and customized laser cut models.
Anaheim, Calif., which attracts roughly 17 million visitors annually, single-day tickets It will take to the new era of digital printing by keeping glued to the vision and yet
now cost $99. Starting on Sunday, the park will charge three different prices based on spreading wings of magic to take place. Capture the tune in the air, the freshness of a
the calendar. "Value" tickets, for Mondays through Thursdays during weeks when most breath that intertwines with hopes and fills in all dimensions around into an aspiring
schools are in session, will drop to $95. "Regular" tickets (most weekends and many rhythm.
summertime weeks) will climb to $105. "Peak" tickets (most of December, spring break
weeks, July weekends) will cost $119. At Disney World in Orlando, Fla., which includes In using DIFFERENTIAL PRICING STRATEGY,
four major theme parks, the price changes are more complex, because they vary by the best example is the VIP treatment in the skies flying extra comfortably
park. At the most popular Disney World park, the Magic Kingdom, which handles - The PAL Business Class and Premium Economy Special Offer is here to make booking
nearly 20 million visitors annually, single-day prices will remain at the current level, experience even better. The country's only 4-star airline has great deals coming way,
$105, for value periods. Prices will rise to $110 for regular periods, and to $124 for the providing premium comfort at great fares, all yours beginning this month. Get the
peak. Disney tends to increase ticket prices once a year recently, at well above the rate same heartfelt service straight from seats worthy of trips. That's the signature
of inflation and it always prompts a degree of consumer outrage. But in purely Philippine Airlines experience: warm smiles, delectable in-flight meals, and a dedicated
economic terms, Disney's price increases have been modest considering the soaring crew. And the same Business and Premium Economy perks remain, of course: (1)
demand, analysts say. During the company's last financial quarter, which ended on priority boarding, allowing to skip lines when checking in and getting on the plane; (2)
January 2, domestic park attendance rose 10 percent from a year earlier, setting increased baggage allowance, giving more space for things need and things bring
records. Attendance in the final quarter of 2014 rose 7 percent from the same period home; (3) more room to move, complete with spacious premium seats and built-in
in 2013. Overcrowding during holidays, particularly at the Magic Kingdom, has become rests for the legs and feet; (4) better dining, all with metal cutlery and deliciously
enough of a problem endless lines for rides do not make for "the Happiest Place on satisfying meals; (5) added entertainment, showing a wider view of fun with personal
Earth" that Disney had little choice in moving to a demand-based ticket-pricing my PAL eSuite screens and access to speedy myPAL Wi-Fi connections; (6) and extra
structure, analysts say. "In addition to expanding our parks, we are adopting seasonal amenities under Business Class: Mabuhay Lounge access, full-flat beds, a plush duvet
pricing on our one-day ticket to help better spread visitation throughout the year," a for long-haul flights, the all- new Furla Amenity Kit, and a dine-at-your-leisure gourmet
statement from the company said. "Multiday tickets, annual passes, and visiting during meal service. MANILA TO BANGKOK BUSINESS CLASS PREMIUM ECONOMY $499 $ 31
nonpeak periods also provide our guests with options and savings." A Disney BUSINESS CLASS MANILA TO SAPPORO HOLIDAY $1109 PREMIUM ECONOMY 50% OFF!
spokeswoman declined to comment beyond the statement. Demand-based pricing, BUSINESS CLASS MANILA TO MELBOURNE '$ 175 PREMIUM ECONOMY $ 719
which is commonly used in the lodging and airline industries, has already been adopted
by other theme park operators in the United States, including Universal Studios, which In using DYNAMIC PRICING STRATEGY,
will unveil a major Harry Potter- themed expansion of its Los Angeles park next month. it can 2$269.0 Blackpink be seen in the airline industry. The airline
Movie theaters and sports teams are also experimenting with similar pricing efforts. IS104.00 industries use advanced computerized systems so that they can alter the
prices of the tickets frequently. Adopted along a wide continuum, this dynamic pricing
In using DEMAND DIFFERENTIAL PRICING STRATEGY ranges from constant to Standing Room infrequent alterations. These airline industries
1. IMAX THEATRE IMAX THEATRE IMAX is a proprietary system of high - alter the prices depending upon several factors like the viability of the seats, several
resolution cameras, film formats, film projectors, and theaters known for having very type of the seats, and also the duration of time before Sunday May 05, 2019 @8:00 pm
large screens with a tall aspect ratio and steep stadium seating. Differential pricing is which the flight departs. Thus for a single seat in flight, there can be several different
often a good fit with more intangible, service-oriented solutions where customers prices possible based on demand. Another example that can be seen is in the field of
place different values on the merits of the service. "IMAX THEATRE" can differentiate music concert businesses. Some of the major players in this field use dynamic pricing
pricing by charging full price to moviegoers who are willing to pay that amount. They to increase the sales of the concert tickets. They keep the prices low initially and then
can still offer incentives to more price-sensitive customers through the use of coupons, raise the prices as the concert dates come near. Now if the prices are kept low
advanced ticket promotions, and other types of discounts for certain types of throughout, then the seller does not get any profit. So when there is a fluctuation in
customers. 2. Philippine Airlines PHP 399 Philippine Airlines 05689 Philippine Airlines is the demand, the seller can benefit by reducing the prices as the demand decreases and
the flag carrier of the Philippines, the airline is the first and oldest commercial airline in increasing the prices once the demand starts to increase. Car drivers know the dynamic
Asia operating under its original name. The airline industry is one of the most notorious pricing of fuel. Fuel prices change multiple times a day at the gas station, sometimes
for differential pricing strategies. Philippine Airlines commonly schedule flights with a even while filling up! This is just one clear example of dynamic pricing, a tool as old as
premium ticket price. As time goes by, they gradually reduce the price point to attract commerce itself. Gasoline prices tend to increase when the av of gasoline decreases
more discerning customers to fill the plane. The nature of differential pricing is such relative to real or expected gasoline demand or consumption. Even when crude oil
that it benefits companies that can only benefit by adding volume. Airlines make no prices are stable, gasoline prices fluctuate because of seasonal changes in demand and
money off of empty seats and it costs them very little extra to sell one more ticket, gasoline specifications.
even at a reduced price. 3. Cabalen and the Enchanted Kingdom Cabalen is a famous
Philippine buffet restaurant chain primarily serving traditiona Filipino entrees heavy on In using ESCALATOR CLAUSES,
influences from the Pampanga region of Central Luzon, ranging from Filipino, Thai, and Air Asia operates with the strategy of escalation clauses or also called
even Japanese Cuisine. The Enchanted Kingdom is a famous theme park in the escalator clauses. There is a competition between the other airlines when it comes to
Philippines. It is located in Santa Rosa Laguna. Holiday Cabalen Rates Eat All you Can. their pricing strategy, bidding happens when airline companies wanting to meet the
Eat All You Want Both Cabalen and Enchanted Kingdom offer discounts both for senior wants and needs of their customers. Even if it is too expensive, the demand for the
citizens and children under a certain age. Buffet-style restaurants and Amusement service that they provide is too high that customers will have no power to choose but
parks attract families and older customers with these discounts and feel comfortable at to avail the service rather than not on taking the service of the airline company. It is a
long-term contract and also because inflation happens anytime the change in their
respective market price will also change but there will be no changes in the perspective in the affordable price that the simple pricing strategy they have. The best practices of
of the customer. For there will be no other convenient way to travel that is why the the business are having a good service and a relaxing ambiance.
market will still patronize it.
In using FLEXIBLE PRICING,
In using ESTIMATED FUTURE COST METHOD, the Philippine Basketball Gillefte Association uses the flexible pricing
there are many firms that use the same pricing strategy such as strategy. The factors to consider in making their final prices are the date of WEEKDANS
Abercrombie, Hollister, and Denim 1987. These firms also based their price depends on WTEKEND the game, depending on where the basketball court is, Premium Bench VIP
how famous their brand is. For example, the Abercrombie brand is quite famous due to h p 2 900.00 P 2,900.00 opponents, and in major events of the game. The first
its casual designs of jackets and it uses soft fabric to its product that is why it will cost Premium Box P850.00 P850.00 photo [on the left] shows the ticket prices of the very
to buy one from them. Shortly, their cost would vary along with time. This firm needs first Patron A P 700.00 P700.00 Patron B P600.00 P 600.00 game of the cup. Weekdays
to maintain its reputation when it comes to selling jacket apparel for them to stay in and weekends prices are the Patron C P 550.00 P:550.00 same since it was the first
business. The main strategy of these firms is making only limited designs of their game. In comparison with the Box VIP P 350.00 P350.00 second photo [on the right
apparel and making an impact on the customers making it a unique kind of jacket. The side]. it has a much lower price Box Reg P 250.00 P 250.00 P150.00 P 150.00 because
price varies on the quality of the product as well as its design. If it is more fashionable the second photo is the finals of the cup. That is Box - SRO Upper Box P 100.00 P
and it is still in style and of the trend, it will surely cost more. Even if the product is 100.00 why it has a higher price than the other one. It could be Upper Box SRO P 75.00
outdated but still in great condition it can cost more in the future. This strategy helps P 75.00 also notice the price difference between the weekdays and Gen Adm P 30.00 P
these firms to manipulate the prices of their apparel to maintain the cycle of their 30.00 weekends game. On weekdays, the tickets are lower than the weekends for the
business. fact that weekdays are working days. Also, Amazon Marketplace is an e-commerce
amazon marketplace platform owned and operated by Amazon that enables third-
In using ESTIMATING DEMAND CURVE, party sellers to sell new or used products on a fixed-price online marketplace alongside
the Teacup milk tea was one of good milk tea shops. Their products have Amazon's regular offerings. Using Amazon Marketplace, third-party sellers gain access
good quality, a good ambiance that is why the customer always come back to their to Amazon's customer base, and Amazon expands the offerings on its site without
store. The manager of the shop always ensures that the foods offered are good. In having to invest in additional inventory. In this selling role, one source the products
terms of demand curves, they always check or calculate the demand for goods based sold, create and manage the product listings, control product pricing and supply lines,
on their sales. and manage sales, shipping, and customer service. So, they pay fees to Amazon for
every item sold. On Amazon, as well as multiple other marketplaces, e-commerce
In using EVERYDAY LOW PRICING, stores, and sales-related businesses, dynamic pricing is utilized by retailers to optimize
many people choose to buy shawarma shack because they offer a lower product prices. Dynamic reprising creates flexible prices depending on many different
price than the other brand with the same quality of taste. In every store of shawarma variables. Klook's Wilfred Fan predicts a shift to flexible pricing. Airbnb says it
shack, they have their poster that stated Buy 1 Take 1 that attracts the attention of a estimated direct economic impact tops 100B. This KLOOK is largely based on
lot of people, they offer to buy 1 take one everyday day and for me, that is a very good accommodation, be interesting to see how much experience can add to this in the
strategy. And also they choose one of the famous local artists as their endorser. coming years.
Celebrity endorsements also play an important role when it comes to influencing brand
preference. According to marketing studies have reported that famous people increase In using, FOOLISH FELLOWSHIP,
awareness of a company's advertising and create positive feelings towards brands. This Jollibee is a price taker that must accept the going market price
observation makes me realize that business to be successful, you need to choose the determined by the forces of demand and supply. Their products are priced with the
best strategy and focus on how to attract markets or consumers because the most 'going rate' or in line with the prices charged by direct competitors Jollibee has fewer
existence of a business depends on customers. stores. It originated in the Philippines and is typically cheaper than McDonald's. Both
offer Filipino-style spaghetti, chicken, and burgers. Jollibee occasionally has other
In using EXPERIENCE CURVE PRICING AND PRODUCT LINE PRICING, specials and some unique items not found at McDonald's Philippines. I.e. There is a
Matsushita Electric Industrial Company was in the race to develop a burger with pineapple called the aloha burger, they also have a beef steak with gravy
commercially viable videocassette recorder in the 1970s. It got its VHS format accepted and rice. Jollibee is famous for its chicken joy, or fried chicken. McDonald's is famous
as the world standard and reaped enormous experience curve based cost economies. for their burgers. The price of competing products is used as a benchmark. The
This cost advantage constituted a formidable entry barrier to new competitors. business may sell its product at a price above or below such a benchmark. Setting a
Matsushita's strategy was to build global volume as rapidly as possible. To ensure that price above the benchmark will result in higher profit per unit but might result in fewer
it could accommodate worldwide demand, the firm increased its production capacity units sold as customers would prefer products with lower prices. On the other hand,
33 fold from 205,000 units in 1977 to 6.8 million units by 1984. By serving the world setting a price below the benchmark might result in more units sold but will cause less
market from a single location in Japan. They realized considerable experience curve profit per unit. P150mM
advantages.
In using FOOLISH PENETRATION
In using, FIGHT STRATEGY, HanesBrands, Inc. is a socially responsible manufacturer and marketer of
Amazon and Walmart are using the price war strategy to gain a large leading everyday basic apparel under some of the world's strongest apparel brands.
market by attracting customers with penetrating the price of competitors. Because HanesBrands, Inc. utilized a penetration pricing strategy for its Moistfree apparel to
these two retailers have the same concept when it comes to pricing strategy. These provide a low price to capture a large share of a large market, resulting in lower
two world's largest retailers believe that "Lowering the price or giving a discount" to production costs. However, before implementing a penetration pricing strategy, they
their products might get a lot of sales and leads to a large of market growth. Both will ensure that it has the production and distribution capabilities to meet the
believe that price is the one that matters most onto their target markets. Due to the anticipated increase in demand. With this strategy, the new MoistFree product
strategy, these two are having difficulties getting their profit margin. Walmart is the demand will attract new buyers or existing buyers from competitors like Under Armour
world's largest retailer. It has introduced a program to temporarily lower the price and Adidas. Two potential disadvantages HanesBrands can face by using penetration
consumers pay for some items on its marketplace site Walmart's new strategy, dubbed pricing. They are the competing suppliers the following suit by reducing their price and
the Competitive Price Adjustment program, will be applied to "selected sellers and the impact of reducing the price on the image of the offering, particularly where
selected items only," according to the description. Sellers cannot request to be buyers associate price with quality. They planned to face these disadvantages by
included. 'Buy Box' Walmart's pricing plan mirrors past Amazon efforts. A plan called increasing advertisements of the MoistFree product if competitors plan to reduce the
"Discount Provided by Amazon," allowed the Seattle- based company to cut prices of prices. Hanesbrands has a great observable fact of considering its price to the product.
third-party products for a limited time, then pay the seller the difference between the They set the price of their product much lesser than Under Armour and Adidas, but
discounted and listed price. Participating in such programs helps ensure that vendors they have the same quality products as their competitors'. Each company uses the
get the most prominent positioning on Amazon's site, known in e-commerce circles as same Texlon fabric, which brings the same effect of ventilating and maximum comfort
"winning the buy box." amazon Walmart Recently, Amazon introduced "Sold by to the user. The consumer will understand the quality of the fabric of MoistFree
Amazon," a system where sellers give Amazon permission to slash the price of their product is considered the same as the competitors' and would want to buy at a
products at will in exchange for a guaranteed payout to help protect their profit cheaper price with HanesBrands. With the two disadvantages working for and not
margins. Amazon has also made it easier to buy single, inexpensive items-like a stick of against HanesBrand, this will place a high demand for the MoistFree product. The
deodorant-without having to pair it with other items to meet a minimum order marketing strategy of Coca-Cola is a mix of three important elements - affordable
threshold. Walmart and Amazon have both rolled out next-day shipping on many prices, worldwide accessibility, and great consumer connection. The brand is present
items, hoping that the added convenience will lure shoppers and offset the strain it across more than 200 nations and is sold in packets of various sizes. The products are
places on their supply chains. (Boyle M. (2019) Walmart vs Amazon price war. priced competitively because of the heavy competition in the soda industry. Coca-
Retrieved from: https://www. bloomberg.com/news/articles/2019-10-14/walmart- Cola's global reach has been made possible by a large network of more than 250
subsidizing-some-vendors-in- online-price-war-with-amazon) bottling partners. Its bottling partners manufacture, package, merchandise and
distribute the final branded beverages to its customers and vending partners. The
In using FIXED PRICING, vendors then sell their products to the consumers. Its bottling partners work closely
with its customers and execute Coca-Cola's localized strategies. Among a large number
Lomi is a noodle dish that is popular in the Batangas area. It has thick
of customers of Coca-Cola are restaurants, movie theaters, amusement parks, and
noodles in a thick soup base. Its flavor is further enhanced by crushed chicharon and
similar other small and big customers. (The Coca-Cola Company (2015). Retrieved
served usually with pork and egg toppings garnished with spring onions and garlic bits.
from: https://pdfs.semanticscholar.
Ariel's Lomi Haus offers P40, ₱50, and P60 serving for their lomi. The pricing strategy
org/14aa/048af8ab98ee538c887f27b2570aeb8ef17f.pdf) Starbucks has a unique
that they are using are they always lowering the price, unlike other lomi business, they
marketing strategy that starts right from its products. It has differentiated itself from
are competing to the other branches but this business will lead you to the satisfaction
others based on the premium quality of its coffee. From its humble origins in Seattle,
the brand has spread throughout the world to become the number one coffee retail emerging and the degree of competition increasing, it diversified into several products
brand. It's a multinational brand and the newest chapter in its international growth to serve different segments. It came up with chicken nuggets, wedges, garlic bread,
story is the Asian part. Starbucks has used the formula of quality-based product smiley, etc. International marketing strategy. Pizza Hut started with a local market
differentiation which has resulted in higher popularity and customer loyalty. However, strategy in Kansas, the USA then moved on to regional markets in and across the USA.
its marketing strategy is not limited to only products, but Starbucks is equally great and In 1968, Pizza Hut started its international movement by opening its 1strestaurant in
unique in other aspects of its marketing and promotion. (The Marketing Strategy of Canada. And today Pizza Hut is the world's largest pizza chain with its presence in more
Starbucks (2019). Retrieved from: https://notesmatic. com/2017/01/marketing- than 100 countries. Pizza Hut mainly sells 4 types of pizzas: Pan Pizza, hand-tossed
strategy-of-starbucks/) Marketing Mix of Uniqlo analyzes the brand/company which pizza, stuffed crust pizza, and Thin N Crispy pizza. Pizza Hut serves these standard style
covers 4Ps (Product, Price, Place, Promotion) UN and explains the Uniqlo marketing pizzas everywhere in the world but at the same time, it offers its customers to choose
strategy. The article QLO elaborates on the pricing, advertising and distribution different toppings as extra mushrooms or extra capsicum and onions with extra cheese
strategies used by the company. · Price: Uniglo is a mid-range product and prices range or chicken toppings like toppings of meat, bacon, fish, ham, beef topping, pork
from $25 to $100. The pricing is competitive, and they differentiate themselves from toppings, etc. Secondly it offers what is known as "Value meal combos" wherein it
the competition through unique simple designs and bright colors. The quality of the offers a combination of pizzas, appetizers, beverages, etc. at lower prices. For instance,
products is very good and that appeals to the budget customers as well as informed Pizza hut introduced "Meal for 2" which offers medium pan/ fresh pizza, garlic
shoppers. The main pricing strategy in its marketing mix is to compete with its breadsticks with 2 glasses of Pepsi. Similarly, pizza hut also offered "Meals for 4" where
competitors and build a strong presence. They sell selected products at promotional it offered 2 medium pan pizzas, with one plate of garlic bread and one portion of
prices which are generally $5-$10 less compared to the retail prices. Uniqlo also wedges with 4 glasses of Pepsi/Soup. Pizza Hut by offering standard products seeks
provides free shipping on all orders. · Product: Uniglo is a leading apparel and clothing economies of scale and by offering modification options enhance customer satisfaction
line, which has a strong presence in the high-quality casual clothing market. Uniqlo has which adds to brand equity of Pizza Hut Product innovation strategy. The SUPREME
a wide product portfolio in its marketing mix and caters to all age groups as well as high/low pricing strategy has several advantages for HOT Pizza Hut Used to create
genders. . Place: Uniqlo sells through its specialty stores in almost all major cities excitement. Set high prices DEALS initially to send a signal that its products are the
throughout the world. Apart from that, it sells online through its website. The company LARGE PAN PIZZA 3 829 best in quality and the service offered is excellent. Helps in
currently operates 1920 stores throughout the world. Some of the countries of segmenting the market as Pizza Hut can sell "the extreme pizza" to the customers who
operation are Australia, Canada, China, France, Germany, Hong Kong, Macau wish to pay higher prices as well as to the bargain hunters too. Pizza Hut in formulating
Indonesia, Japan, Korea, Malaysia, Philippines, Russia, Singapore, Spain, Taiwan the complete pricing strategy focuses on "Value which it is providing to the customers
Thailand, UK, etc. Uniglo has an Inventory control team that monitors the store stocks at a particular price". As far as the pricing of established products is concerned, Pizza
every week and maintains the optimum level of inventory. . Promotion: Uniglo has a hut believes to give "Value for Money "to its customers. Thus to provide maximum
customer creation team that analyzes the customer purchase data which helps in value to the customers and enhance the brand value, it sometimes maintains the same
gauging the customer preference and design promotional content accordingly. The prices while sometimes reduces the prices, while sometimes increase prices also.
companies growing online sales provide the team with necessary big data on the "One-Price" Strategize. It charges the same price to allot customers under similar
customer purchases and preferences which they use in their analysis. They advertise conditions and for the same quantities. This helps in establishing a favorable and fair
using celebrities like Charlize Theron who casually relaxes in her car wearing light image among its customers as well as having a stable market. Product - pizza hut
Uniqlo clothes on a breezy summer afternoon. This creates a sense of lightness and introduced several locally influenced products according to the taste buds of local
casual wear for its products. In another ad campaign, they highlight women from people. Variety -a large variety of pizzas, for example, cheesy bits, stuffed crust, thin
different countries wearing Uniqlo clothes in their day to day life and they give a crispy, etc. The quality-large number of market share is with pizza hut because of high
tagline "Made for All". (The marketing mix products (2017). Retrieved quality. Design always round pizza Packaging- delivery through hot oven inboxes. Price-
from:https://www.mbaskool.com/ marketing-mix/products/17655-uniqlo.html) uses market skimming price strategy, high price Promotion -TV ads, newspapers,
billboards, etc. promotions like a meal for 2, meal for 4, meal for 6 Place having outlets
In using GENERIC STRATEGY, in shopping malls, roadside, air: recede - Social and Behavioral Sciences.
TESCO, the leader in Supermarkets in the UK, has partnered with SM, the (https://www.mindtools.com/pages/article/newSTR_94.htm) Shopee is the leading e-
leader in Supermarkets in the Philippines, to distribute Tesco retail products in the commerce platform in Southeast Asia And Taiwan. Launched in 2015, it is a platform
country. Tesco products range from snacks, sauces, beverages, baking needs, beans, tailored for the region, providing customers with an easy, secure, and fast online
and condiments to personal care, kitchen items, and home aids. The most affordable shopping experience through strong payment and fulfill support. The company
category is Tesco Everyday Value, which is equivalent to the SM Bonus product line. believes that online Shopping should be accessible, easy, and enjoyable. The purpose
McDonald's Generic Strategy McDonald's primary generic strategy is Low-cost Shopee of the company believes in the transformative power of technology and want
leadership. In Porter's model, this generic strategy involves minimizing costs to offer to S change the world for the better by providing a platform to connect buyers and
products at low prices. As a low-cost provider, McDonald's offers products that are sellers within one community. Shopee gives amazing deals to all the valued customers,
relatively cheaper compared to competitors like Arby's. Also, cost minimization is a like vouchers, discounts, and free shipping. It uses Freight-Absorption pricing
financial strategic objective McDonald's based on the cost leadership generic strategy. strategies, where shop absorbs all or part of the cost of transportation. This amounts
However, the company also uses broad differentiation as a secondary or supporting to a price discount and is used as a promotional tactic. Lazada Shopee Checkout
generic strategy. This secondary generic strategy involves developing the business and Checkout- Perkaue 1 ef 1 P187,00 120 00 OreterTutal (10-Hemsn) Vouher 100.00
its products to make them distinct from competitors. For example, through McCafé =157.00 Teml:P1.357,00
products, McDonald's applies the broad differentiation generic strategy. In addition,
product innovation is related to McDonald's broad differentiation generic strategy. In using GOING RATE PRICING
Google Generic Strategy Google The generic strategy adopted by Google for building a , Starbucks and Macao Imperial Tea winning strategy; 1. Right market
source of competitive advantage is that of differentiation. It involves differentiating the segmentation. The company has stayed with the upper-scale of the market, competing
products and services from the competitors. the main service that Google is known for on quality rather than price. Starbucks is one of the top- ranked in the coffee industry
is its search engine. Compared to all the other search engines, Google's is not just the as well as Macao Imperial Tea who are known for their Cream Cheese and Chestnut
fastest but also the smartest. Apart from the fastest search engine, Google has brought Cream milk tea variants, which is the best- selling drinks ranked one in the milk tea
abroad an array of products and services that are meant for a broad target market industry last 2019. 2. Execution. The company continues to focus on its original product
made up of individuals, professionals, and organizations. So, Google's competitive bundle that includes good products, quality service, and a nice environment to hang
advantage is going to sustain. The reason is the continuous focus on technological around. 3. Location and branding give the two franchises a "captive market" and these
innovation. pre Redbox Generic Strategy The strategy used by Redbox is the Focus Cost advantages have allowed them to endure the many changes they have encountered
strategy. Redbox is a major DVD rental company, uses vending machines placed over the decades they've been in business. Like the change in consumer preferences,
outside grocery stores and other retail outlets redbox to rent DVDs of movies for $1. growing competition, and market saturation. In conclusion, Location and branding
There are ways to view movies even cheaper, such as through the flat-fee streaming make Macao Imperial Tea and Starbucks operate like ATMs. All it takes to keep on
video subscriptions offered by Netflix. But among firms that rent actual DVDs, Redbox feeding the machine with cash is to come up with the right product offerings to
offers unparalleled levels of low price and high convenience. Redbox machines are capitalize on the advantages that put each of them at the head of the game in the first
available at several locations in southern Ontario. Mercedes-Benz Generic Strategy The place. JOLLY SUPER Jollibee is the largest fast-food chain in the Philippines, MEALS with
generic strategy used by Mercedes-Benz was the Focus Differentiation strategy. Their over 1,150 stores nationwide. A dominant market leader in the Philippines, Jollibee
dedication to cutting-edge technology, styling, and safety innovations has made the enjoys the lion's share of New the local market that is more than all the other
firm's vehicles prized Mercedes-Benz by those who are rich enough to afford them. multinational .150 brands combined. And Customer satisfaction has always been key to
Mercedes-Benz also has a reputation as a world leader in safety and is renowned for its Jollibee's success. Never losing sight of its goals, Jollibee has grown to be one of the
huge expenditure in Research and development (R&D). It has won numerous industry most recognized and highly preferred brands in the Philippines. Now the market leader
awards for safety and technological innovation. These have strengthened its desire to among fast-food chains in the Philippines, claiming a market share that totals more
continue producing the most technologically advanced cars on the market in order to than half of the entire industry. Also, Jollibee provides a coupon for everyone to avail
differentiate itself from rivals and improved the reputation of its brand. of their product. And all their foods are affordable for everyone. SM Supermalls is one
of Southeast Asia's biggest developers and the operators of 72 malls in the Philippines,
In using GEOGRAPHIC PRICING, and 8 malls in China. SM Supermalls provides family fun experiences as it partners with
Pizza Hut, the world's largest pizza chain with over 12000 pizza TASTIEST the best-loved brands and events. Also, SM Supermalls having a sale or discount price
restaurants and delivery outlets worldwide has the PIZZAS NOW STARTING AT vision of up to 70% in selected items to increase the demand for their product.
becoming the best-branded restaurant with 199 the best delivery and franchise
network thereby providing the best food and best value to the families. Pizza Hut as a In using HIGH/LOW PRICING
company has always tried to target and satisfy various diverse customer categories in prices of products of both Nike and Adidas are high, with Nike products'
different countries depending upon various factors and situations. Total market price being higher as compared to Adidas. The pricing strategy used by Adidas is that of
strategy Pizza Hut started with a single product i.e. Pizza but with different segments a market skimming strategy. Adidas products' prices are dependent on looks and
$6997 color. An example is where a pair of Adidas white color shoes are more gives his friend good-natured grief about his friend overpays for almost everything.
expensive in comparison with another pair of shoes of the same quality but in a When he shared his results with Expedia (the parent company of Orbitz), its
different color. The price of Nike products is relatively higher when compared to spokeswoman explained that the pricing differences he found between the app and
Adidas ones. It uses value-based pricing and price leadership strategies, where the website can be because its suppliers allow different prices to be offered to mobile
price of the product is based on the value that is placed on that particular product by customers as well as members (no fee to join) who are logged in. In that situation,
the consumer. To remain relevant in the market, Nike uses competitive and different prices of vacation packages vary as to what the customers are using (may it be an app
pricing strategies from those of Adidas. The pricing strategies of Nike are based on or a website) or a mobile customer versus a member (no fee to join) who are logged in.
premium segments as their target customers. Brand of Nike has high premiums, and By that, retailers evaluate their customers in terms of their capacity and willingness to
this explains why their prices are higher when compared to Adidas. Promotional & pay and Individualized Variable Pricing Strategy is present. This can be viewed as unfair
Advertising Strategy by Nike & Adidas. Typically, it has a strong belief that "discount for those who pay higher than the actual price but it also seems beneficial to those
sales = low price" Customers for firms adopting this type of strategy also have a strong who couldn't pay more. Retailers at this type of strategy evaluate the characteristics
preference in purchasing the products sold in this type or by this certain firm. They are and actions of each shopper to create a profile that generates a personalized price.
loyal to a specific brand. Many big firms are using this type of pricing strategy (ex: Another example of Personalized Pricing can also be found at most auto dealerships.
Reebok, Nike, Adidas). The way competition prevails in the shoe industry is through The goal of salespeople is to determine how much each customer is willing to pay for a
high-low price. Another good example of a product that uses this kind of strategy is the car through individualized negotiation. Prices are tailored by noting each customer's
Apple Company. Apple has played this game with itself by launching products such as characteristics and observing their actions. How shoppers dress, the car they currently
the iPhone at artificially high reference prices - the iPhone cost $599 when it first hit drive, and answers to seemingly innocuous questions (Where do you live? What do
the streets- and then rapidly lowering that price. Today, a $199 iPhone seems like a you do for a living?) provide clues. Salespeople also observe actions, such as the other
steal; Apple in essence is using its first-iteration pricing as a reference to make its cars people are looking at and how they behave in negotiations (passive or aggressive).
current products feel affordable. They do this kind of strategy every time they release a Evaluating each shopper's characteristics and actions create a pricing profile. Think of a
new version of a new line of the product under its name. Apple will lower the price profile as a polygraph test that suggests the highest amount each shopper will pay.
range of the older line of products every time they release new ones. This makes the Web retailers can similarly profile their shoppers. Just as someone's clothing can
older ones seem cheaper than when they first released it. provide pricing clues, so can how a customer accesses an online store. Is a shopper
using a laptop, app, desktop, or internet on their smartphone? What operating system
In using HORIZONTAL PRICE are they using? Where are they located? A customer's actions also provide pricing
Fixing when iPhone 4s was introduced in the market four years ago, its clues: What other products are they looking at? How many times have they visited the
price was huge. Few people could afford an iPhone. As time passed, prices of the site? Much like car salespeople, web retailers can electronically evaluate the
iPhone 4s have decreased gradually, such that nowadays many people can afford an characteristics and actions of each shopper to create a profile that generates a
iPhone. A few days ago iPhone 7 has been launched in the market. Before that iPhone personalized price.
6 was launched. Both these phones sold in large quantities and at a very high price. In
fact, after long debates and reviews regarding the quality and the increased price of In using INITIAL MARK-UP,
the phone, people decided to wait until they will be able to buy the iPhone 7. optical is well known for Its quality products and good service they are
Presumably, the price of the current iPhone 7 will decrease drastically in the next .r. also good at implementing pricing strategy. Executive Optical wise in putting markups
Some technological firms offer freebies to their customer in every purchase product/ to their products that's the reason why EO-Executive Optical is one the leading
cellphone either new or old unit. eyewear industry in the Philippines. A comprehensive eye checkup is Optical Shop
performed by a well-trained and competent optometrist. They also use only state-of-
In using IMAGE PRICING the-art facilities and eye care equipment. Having clear eyesight is essential to fulfilling
since Image Pricing involves setting prices higher than mal to stand the one's potential. Many are dire need of proper eye care and eyeglasses but could not
better quality of the Most of the fashion industry like Channel, olex, Apple and Nike, afford the cost. The company maintains lower prices to attract more customers. They
and many more luxury products use this pricing strategy. one example here is the offer different varieties of choices to meet the expectations of the customer through
Apple Watch Limited Edition In which Premium pricing akes products look exclusive the products they offer.
and high quality by giving it a high price. Tech ciants Apple has been selling their line of
products such as iPhone, Ipad, and the Pod for about a decade now. Their strategy for In using INITIATING PRICING INCREASE,
pricing and marketing is that of differentiation. They make high-quality items that their the increasing capacity of flour millers and the entry of two more players
competitors would find hard to mimic and sell at a lower price for the same benefits. will keep flour prices in the country competitive, according to the Philippine
Association of Flour Millers Inc. Philippine flour prices declined to P670 per 25-kilogram
In using IMPACT OF PRICE ON OTHER PARTIES bag this year from a range of P870 to P900 a bag four years ago. Inflation is the rate at
recently opened in the first quarter of 2016, the fifth branch in the Bag of which the general level of prices for goods and services is rising and, consequently, the
Beans line is named after the owner Charito. Designed to capture high-end than the purchasing power of currency is falling. As reported by the National Statistics Office,
rest of its predecessors, French-style Semi- fine dining restaurant. Chariot presents the Philippines' annual inflation rate slowed to 1.3% in January of 2016 from 1.5% in
special drink each month to excite regulars and visitors who are always coming back December 2015. This will also serve as a disadvantage to the public as well as the
for more. Freshly baked goodies are available day and night from its dedicated pastry bread industry in the country since the annual inflation rate still increased even if the
store, great for romantic dates and private dinners, chariot earned its reputation increase went slower by 0.2%. According to the vendor in Alabang Muntinlupa, the
highly-noted venue for wedding engagements and marriage proposals. Even for increase in the price of ingredients affects the sale retail price of the bread. The vendor
families who just want to relax and feast on various delectable food options. The said that they've been doing everything to bear the higher costs and been cutting
Conti's bakeshop and Restaurant offers bakeshop creations that have shared joy in operating costs to keep prices low but prices of flour went up every time. The reason
birthdays, anniversaries, Christmas, weddings, and many different events. Their cakes for this problem was price hikes on the prices of bread and other flour-based products.
can be ordered either on the whole or by slice both regular and mini sizes. They offer The latest increase in the price of flour causes vendors to make extra costs to
Frozen cakes like Blueberry cheesecake, mango cheesecake cookies, and cream consumers. Compared to the statement of the vendor in Sta. Rosa, Laguna, sometimes
cheesecake, turtle pie and sans rival also Chilled cakes chocolate mousse choco when the increase of prices of ingredients results in few productions of the bread
overload, moist chocolate cake, mocha tiramisu, strawberry shortcake. Contis uses because the customers do not patronize their bakeshop because of the products being
their edge of having a passion to create delectable food and comforting warmth of sold and customers may look for another bakeshop. Besides, consumers now prefer
one's own home. Since 1997 in Paranaque bakeshop and restaurant of countries has higher-quality products but they are buying less, not like before. The rise in food prices
created and shared a lot of happy memories with a different type of people. With the causes negative impacts in weak food-importing countries threatening their security.
satisfaction of every guest that they encounter their store has been talking of the town High-priced food reduces the real income of the most vulnerable poor populations
who gives a vibe of a family restaurant that brings the feeling of home, and they which may cause internal troubles. One thing that keeps them running is to give their
extend their hospitality in ten communities serving more than 150 dishes that help best and skills, it's important to value what you do. Simply, if it looks good and tastes
them write their success that they have today. great, people will pay for it. Valuing your goods at what you feel they're worth can help
you maintain a low-cost percentage. That will benefit both the seller and the buyer.
In using INCREASE PRICE AND QUALITY,
Bazaar is offering socks for a lower price. Socks are 3 for 100 pesos. They INITIATING AND RESPONDING TO PRICE CHANGES; INITIATING PRICE CUTS
attract many customers because of its affordable price but they need to improve The Ma. Mami House in Santa Rosa, Laguna, and the Mami Stall in
quality. Uniqlo is a well-known clothing line, they are also selling socks. The price is a Nagcarlan, Laguna. They are offering the same product but in different price. The
bit higher but the quality is excellent. quality of ambiance of the stall at ground floor in the mall is different from the stall in
Nagcarlan because the Mami house of Nagcarlan is just located at the wet market and
In using INDIVIDUALIZED VARIABLE PRICING, the customers are the drivers, salespersons in the wet market, and other people who
one example is an experience of a man named Rafi Mohammed on passed by who have needs in satisfying their hunger. But even this stall is just small,
October 20, 2017, when he was searching for a Vacation package to New York City they have regular customers, and the taste of the food is very satisfactory even it is at
using Orbitz's iPhone app. Mr. Mohammed was looking for a vacation package to New a low price and not that good in terms of the physical image of the store. In one
York City using his Orbit's iPhone app. While on settling on a hotel, he accessed Orbitz's serving the special mami is 40 pesos while the regular is 30 pesos In contrast, Mami
website on his laptop to book the package. He realized that the package on his laptop - Restaurant is different. They have a pleasant ambiance becaus they are located at the
identical flights, hotel, room type - was $117 more (6.5% more) than the price on mall wherein the customers are the mall shoppers or h salespersons of different stores.
Orbitz's app. A quick scan found that prices of identical vacation packages often differ When it comes to the quality of the foods, it also has a good taste, clean, and very
between Orbitz's apn and website. He then did a side-by-side app test of the same satisfactory. The price of the foods in Ma. Mami Houss depends on the types of mami.
package with a friend who was sitting next to him. His friend's Orbitz app price was $50 The mami house in Nagcarlan, Laguna's competitive advantage is having a good quality
(2.8%) more than his app price. Amazingly, Orbitz knew something that he regularly
of food and service but in different price offerings. They can capture a large market bargain hunters are likely to buy other items if only out of convenience, which is how
share in the area by using that strategy. the store remains profitable. Supermarkets often use leader pricing on a limited basis
as part of a temporary sale. One problem with this approach is, consumers begin to
In using INTERNATIONAL PRICING STRATEGY, mistrust advertisements. For instance, a customer might hear about a bargain but
Coca-Cola or popularly known as Coke. is a world-famous carbonated soft worry that the promotion will end before he has time to get to the store or believe
drink. Coca-Cola dominated the world's soft drink market throughout the 20th there is a hidden catch, like a requirement to buy a large number of items. One way
Century. The main ingredients of the drink are hidden in its name - Coca leaves and supermarkets can collect valuable customer data is to create a loyalty program. This
Kola nuts i.e. a source of caffeine. Given Interbrand's "best worldwide brand" requires customers to opt into a data-collection program, which tracks their purchases.
investigation of 2015, Coca-Cola was the world's third most profitable brand, after Such programs offer several price strategy enhancements. GIVEAWAY SHARE & TAG
Apple and Google. In 2013, Coke items were sold in more than 200 nations around the First, joining the program qualifies customers to receive FREE $200 LIGHT or $100
world, with shoppers drinking more than 1.8 billion organization refreshment servings ORDER DISCOUNT lower prices. Second, the supermarket can use the data to create
each day. Coke additionally utilizes an international pricing strategy. For example, the BLACK FRIDAY SALE pricing profiles, predict buying habits, and otherwise optimize NOV
cost of a 2-liter container of Coke in the United States is unique about the cost of a 28-NOV 2D SP & TS their pricing strategies. Finally, knowing what customers -15% buy
similar item in China. This needs to do with the distinction in financial conditions, habitually allows supermarkets to offer coupons and promotional discounts in a
aggressive circumstances, and laws. Along these lines, Coca Cola has been following targeted manner, lowering the cost DISCOUNT of promotions while increasing their
different evaluating procedures because of the necessity and considering the effectiveness. Supermarket chains have volumes of data on consumer buying habits.
presentation of new items focusing on various gatherings of people. Some use this to construct pricing profiles for different stores, which is called zone
pricing. Establishing different pricing profiles, or zones, allows the supermarket to
In using LIQUIDATING MARKDOWN MERCHANDISE, optimize its prices by region. Customers in high-income regions, for example, might be
there is a lot of companies here in the Philippines that Liquidly markdown willing to pay more for bathroom tissue than customers located elsewhere. The
merchandise to maximize their sale. One of the best examples of this is Nike. Nike is supermarket chain can tailor the prices found at different stores to maximize profits
one of the most sought-after brands when it comes to athletic shoes, fitness clothes, across regions. Price wars happen when companies intentionally undercut each other.
and high-quality sports equipment. Good thing Nike Factory Outlet Stores have several For example, when one company lowers its price to meet the loss leader, the market
branches around the metro. They store quality items at an affordable price. Nike leader may further cut its prices to keep or gain more market share. This can happen
Factory consolidated its product and sell to the other retail brand store like Capital Ph for an extended period, spiralling into a price war. Major examples of price wars have
that sells a wide array of shoes on sale. The playground premium outlet, a couple of been with Apple and Samsung and Wal-Mart and Amazon. Amazon and eBay are the
thousand bucks could cop a nice pair. Major sports brands especially Nike are available best examples of businesses that are using loss leader pricing. They started the online
at outlet prices and huge discounts. As such, Playground's Buy 1 Take 1 Sale Events are business trend by offering users special discounts on selected goods. If you ever go
infamously well-attended. These are just an example of a store that Nike products are LAYEST MARTPHONES GREATEST DCA HOURS ONLY to their sites, you will see landing
consolidated and available at a lower price. Furthermore, one of the strategies to pages or banners of promotional offers on some products. When you click on them
liquidate merchandise is to sell online or in an Internet auction. Internet Auction is still and view the actual SALE product, you will notice something else that entices many
in its infancy in the Philippines but may one day be the biggest catalyst in bringing e- online customers. There is a section called "People also viewed" to attract customers
commerce to the Philippines because people love to shop for bargains and auction to view other products that may not even be discounted. Amazon rhe goods being
houses are great places to sell items you don't need or use anymore. It is also a promoted are the loss leaders because the online retailer wants to attract viewers into
rational market where buyers and sellers meet at large to discuss sales on possible going through their website and see the goods. In doing so, the ewers will be exposed
items. This is even more true for countries like the Philippines where people don't have to other products, or leads, that are at a higher price but just s appealing. Typically, the
the same purchasing power as those in other countries, hence auctions may seem like leads are related to the loss leaders to get more people to viewing them and even
a natural fit here and will play a big role in how e-commerce will be conducted in the buying them. This is a very good way of increasing sales. Following the success of these
future. Pinoy auctions are probably the et popular and arguably the biggest of them all. tactics by Amazon and eBay, many brick and mortar stores decided to follow suit and
Thousands of things to choose The best example of e-commerce platforms is Lazada. create their e-commerce solutions for buyers. Now major retailers like IKEA, H&M, and
According to the price hts (price.ph) which present the Map of E-Commerce to rank the Best Buy have online stores using loss leader pricing as an effective strategy to entice
Philippines' -commerce players based on average quarterly traffic, mobile application more customers into buying goods online and increasing traffic to the site. CHEERS for .
Pring, and social media followers, Lazada is way ahead of its competitors. And For DEALS DED Other retailers like car dealers use this practice as well. They advertise an
copularity among Filipino consumers, it helps that Lazada, which sells fashion s barel, incredible price on a car or truck, 10K 28K 38K but if one look closely it is just that one
electronics, car accessories, and home appliances, has agreed long to allow apil giant stock item. They even include the stock number in the advertisement. So 12K 10K
SM Investments to use the store to sell its merchandise. Aside from SM a It of stores when a customer arrives, they say "sorry we sold that truck, but we have these others
also cater to its product as a way of maximizing its sale. Indeed, selling merchandise for you to look at."
online is one of the best ways to liquidate merchandise. Retrieved from:
https://iprice.ph/insights/mapofecommerce/en/ ELEVEn In using MAINTAINED MARKUP,
Havaianas is a Brazilian brand of flip-flop sandals created and patented in
In using LOCATION-BASED PRICING, 1962. It is currently owned by Brazilian manufacturing company Alpargatas S.A.
7Eleven always apply the Location Pricing Strategy. Most of their products Inspired by Japanese zori sandals, Robert Fraser became the first to mass- produce flip-
are priced differently depending on the location of the store. Price changes vary on the flops out of rubber. Havaianas was using the same basic strategy without changing the
capacity of the customers living in one vicinity. They conducted researches in one product, communication, or promotion. In Brazil, Havaianas were marketed at
particular place before setting price on the product normally they consider the relatively low prices. However, the Company had an opportunity to position the
demographic profile of the consumers in one vicinity. sandals for a market with a high purchasing power, such as the U.S., Australia, and
Europe. The best example of company and product is sandals from Havaianas, as we
In using, "LOSS LEADER PRICING", can see on the Havaianas store or on other stores that sell sandals of Havaianas. Even
well-known sandals and flip flop brands can still experience having a non- selling
SM Department Store is one of BIG the most popular shopping malls build
product to their business. If there's a non-selling product to their business they reduce
not only in the Philippines SALE but also in China. It all started from Henry Sy Jr., a
its cost but still profitable.
Chinese-Filipino 50% OFF business magnate and philanthropist, who was known for
cleaning shoes before developing SM. SM department store is only a part of the whole
mall but plays a big role in contributing large profits in the mall. During changing In using MAINTAIN PRICE AND ADD VALUE,
season, the department store uses a loss leader to attract more consumers to buy the In this firm, Popeyes Restaurant serves to be one of the fast-food chains
product under loss leader which commonly are those excess products during the past that maintain Price to their product most especially their chicken fillet, with this stuff
season but mainly, their priority is to introduce the newly launched product for the they will assure to be the same with other competitors since they knew that their
upcoming new season. For example, the target consumers are those who look for competitors surround them. As to this, they remain the same to be secure on what bad
summer outfits and supplies. To attract new consumers, the department store began things will happen in the future. Popeye's Restaurant practice Maintain Price and Add
to put Christmas attires and stuffs at loss leader halfway before the summer season Value to get more customers and serve them with passion and love. CHE PoPeYes
starts. Gillette is a famous example of a company that employed a loss leader pricing McDonald's (Chicken Fillet) ICE RIGE RI Mcdonald's McDonald's Corp.'s heightened
strategy in their business model. Several years ago, Gillette was the leader in selling focus on low prices is helping the burger giant win back customers from rival fast-food
razor blades by following an ingenious strategy: selling their mechanical razor well chains with the same price they offer many of the customers become loyal to them.
below the cost to draw new customers. Consider the move as "introductory" pricing This kind of treatment will surely make them be on top. As McDonald practice the
Gillette wanted to build a customer base and stimulate future sales of their products. Maintain Price strategy and add value strategy it helps a lot in improving the pricing
The blades sold or given away by Gillette did not last very long. Customers who strategies they have, as to this in maintaining price it was seen in their product chicken
finished using Gillette's razor typically ended up buying a replacement razor and/ or fillet. As we notice we can eat a lot of time with this product but the price remains the
other products of Gillette. The business model played out successfully for Gillette. same, basically because of many competitors nearby their place. It adds a factor to
which saw high recurring sales for the company. McDonald's not to increase or even decrease the price of chicken fillet. On the other
(https://corporatefinanceinstitute.com/resources/knowledge/strategy/loss-leader- hand, some products have improvements that are why the company needs to add
pricing/) value because of the upgraded features of it. This pricing strategy helps encourage
consumers to purchase the company's products based on perceived affordability. Thus,
LEADER PRICING this element of McDonald's marketing mix highlights the importance of maintaining
Price and add value to encourage customers to buy more products. Starbucks (Coffee)
Leader pricing occurs when a supermarket sells high-demand items at
One of the companies that practice both maintain price and add value is Starbucks.
atypically low prices, even if those prices require taking a loss on that particular item.
They claim the price increase is due to rising labor and non-coffee commodity costs,
For example, supermarkets often have temporary discounts on coffee or other
but with the significantly lower coffee costs already improving their profit margins, it
household essentials. The goal is to attract consumers in search of the bargain. Those
seems unlikely this justification is the true reason for the hike in prices. Besides, the
price hike was applied to less than a third of their beverages and only targets certain
regions. In this thing, they maintain the price of some of their product as they practice In using MARKET SKIMMING AND FINANCIAL OBJECTIVES,
this strategy, as well as they also practice the add value strategy on which they add Smart Pillow will be introduced in the market with a high- price for it is a
value to some of their beverages since they offer the upgraded features of it. new, innovative, and improved product. After some time, if it's no longer selling at its
Implementing such a specific and minor price increase when the bottom line is already peak price, my smart How will be sold into a lesser price to be disposed of and by then
in great shape might seem like a greedy tactic, but the Starbucks approach to pricing is already have thought of a new product to sell again, applying m My target market is
one we can all use to improve our margins. As we've said before, it only takes a 1% stressed-mothers and working adults who are in need to feel Market-skimming pricing
increase in prices to raise profits by an average of 11%. With the ability of Starbucks to tactic. on a vacation even though sleeping. Being at home, outside with lots of chaos
maximize their known profit on a higher level, they master employing value-based and expenses. well-rested is better than going Many companies that invent new
pricing. Profit maximization is the process by which a company determines the price products set high initial prices to 'skim' revenues layer by layer from the market. Sony
and product output level that generates the most profit. While that may seem obvious frequently uses this strategy, called "Market-Skimming Pricing" (or price skimming).
to anyone involved in running a business, it's rar to see companies using a value-based When Apple first introduced the iPhone, it charged an initial price of as much as $599
pricing approach to effectively uncover the maximum amount a customer base is per phone. The phones were purchased only by customers who wanted the sleek new
willing to spend on their products. smartphone and could afford to pay a high price for it. Apple introduced the iPhone at
$599 to capitalize on the early adopters' tendency to hastily buy new technology. As
In using MARGINAL COST PRICING, initial demand subsided, Apple reduced the price to $399 in an attempt to revive
there are various businesses that utilize barginal cost pricing. The said demand. Apple sold at least 500,000 iPhones at $599, making $100 million in extra
strategy is mostly used by small businesses that are Harting and want to create product profit by exploiting favorable market conditions and cleverly using the skimming
demand. The low prices drive their inventories ickly and allow them to sell their pricing tactics. From this example, we can deduce that the base price for the first
products in large volumes and return and creates high revenue. The travel industry iPhone with 8 GB of memory was $399 all along and that Apple temporarily placed a
often employs marginal cost pricing to fill capacity. Hotels, irlines, and resorts must markup of $200 as a consequence of applying the skimming pricing tactic. Another
achieve a minimum capacity to sustain a profit. Not only do these agencies fail to bring good example of this includes the launch of the new Porsche Cayenne - their SUV in
in revenue whenever they are underbooked, but they also lose money in maintenance 2003. There were other SUVs out there, but Porsche knew if they could identify what
costs and staff salaries. The travel web site Price Line enables users to name their price customers were willing to pay first, build a product with specifications the customer
for their travel needs. The bid process allows airlines to sell empty seats and hotels to wanted, whilst also bringing their speedy heritage into the design, they could
fill empty rooms, even if the bid price was far lower than the retail price. Save more on command a higher price and attack the already established SUV market. The Cayenne
your next hotel Thoysandi of deals made evity day Have you tried Cruise Offer Retailers now makes up about 1/3 of their revenue and is a hugely profitable model. Selecta ice
such as Walmart also employ marginal Walmart> *< pricing on seasonal items that cream by Walls is an example of a level 1 market- driving strategy. Selecta is the
have gone out of date. The price of a heavy coat, for example, will be much lower in dominant brand of ice cream in the BIRTH Philippines, but it was not so a few years
the warmer months of spring and summer than in the fall or winter. The marginal ago, as it was neck-to- neck with Nestle. Problematic with declining industry demand,
pricing practice ensures that the retailer will see some revenue from off-season items. the marketers went on to ask mothers what they liked to serve during birthdays and
Overall, based on the gathered data and the companies shown, it is, therefore, safe to what they served. The result of their in sighting led them to launch Selecta's 3-in-1 ice
conclude that marginal cost yamart pricing is an efficient pricing strategy for small cream, combining three of the favorite ice cream flavors in a tub at an affordable price.
businesses because they have minimal fixed costs and they sell items in large volumes With this huge success that turned around shrinking industry demand, they even
to gain higher profit. This will help them assess their profit, production, and cost extended to four flavors with 3-in-1 plus 1, wanting to own the term "3-in-1."
management through cost volume profit relationships. But for bigger companies with a
wide array of operations and therefore has bigger fixed costs, marginal cost pricing is In using MAXIMUM MARKET SHARE,
often employed only as a short-term solution and on a time- limited basis like what Burger King (BK) is an American multinational chain of hamburger fast-
Walmart does on its off-season items and what Price Line does in their unbooked food restaurants. Headquartered in the unincorporated area of Miami-Dade County,
airlines, hotels, and resorts. For these big companies, it is not a method to be used for Florida, the company was founded in 1953 as Insta-Burger King, a Jacksonville, Florida-
normal pricing activities, since it sets a minimum price from which a company will earn based restaurant chain. After Insta-Burger King ran into financial difficulties in 1954, its
only minimal profits. Also, for these big businesses, marginal cost pricing is least useful two Miami-based franchisees David Edgerton and James McLamore purchased the
in the long term, due to the reason that these firms need to generate sufficient profit company and renamed it "Burger King". Over the next half-century, the company
to pay for a large number of fixed costs. changed hands four times, with its third set of owners, a partnership of TPG Capital,
Bain Capital, and Goldman Sachs Capital Partners, taking it public in 2002. Burger King
is one of the most popular fast food in the Philippines. They offer different types of
In using MARKDOWN STRATEGY, food such as burgers and fries. The menu of Burger Kings expanded from a basic
Walmart Inc. is an American multinational retail corporation that operates offering of burgers, French fries, sodas and milkshakes. The "Whopper" became the
a chain of hypermarkets, discount department stores, and grocery stores, first major addition to the menu, and it has become Burger King's signature product
headquartered in Bentonville, Arkansas. The company was founded by Sam Walton in since. Conversely, Burger King has introduced many products that failed to catch hold
1962 and incorporated on October 31, 1969. Walmart is very sneaky with its in the marketplace. Some of these failures in the United States have seen success in
markdown system, so here's a breakdown of how it works so you can score the best foreign markets, where Burger King has also tailored its menu for regional tastes. The
deal: Prices ending in "7" display the item's original price; prices ending in "5" come Burger King aims to offer reasonably priced quality food served quickly in an attractive
after the item's first markdown; and those ending in "1" or "0" signify the final clean surroundings. They offer delivery where you can call or order meals only through
markdown. For example, if you see a product marked at $49.97, then you know that their websites. KING MEALS ADD REGULAR FRIES & 58% KING SAVERS ....... 29 PEPSI AT
it's the original price and should wait for markdowns. When the product is marked JUST T120 50 CRISPY VEG CRISPY VEG Cm POTATO TOTS ₹29 SUPER SAVER HEAL
down for the first time, it will be priced at something like $39.95. Finally, when it's SUPREME F159 80 HIPER SAVER MEAL RERY RING ₹29 ₹55 CRISPY CHICKEN CHICKEN
marked down for the last time, it will most likely be sold somewhere around $29.91. KEEMA CRUNCH SUPER SAVER MEAL SUPER SAVER MEAL 179109 189 119 VEGGIE
(Moor, A. (June 25, 2019).29 Amazing Secrets Only Walmart Employees Knows: Yes, STRIPS ₹29<55 The picture shows its menu. As it has seen the price of each burger cost
There's a method to the markdown madness. Retrieved from https://bestlifeonline. only with the lowest price P39.00 and the highest is P99.00. It also offers a super meal
com/walmart-shopping-tips/) Each week Target marks down items in certain which includes fries and drinks. But the price of each also increases. On the other hand,
departments, in most cases, the first markdown will be 30% off. If something is marked Zark's Burgers started only as a 20-seater, three men powered restaurant in 2009. It is
down one week, generally, in two weeks or so it will get marked down to 50% off, then owned by Rolandrei Viktor Varona who is called by his friends as Mizarks or simply
a couple of weeks later it will finally get marked down to 70% off. This means that if Zacks. Zark's Burgers started only as of the owner's dream of opening his restaurant, a
you're willing to wait a couple of weeks you can get items for up to 70% off. Be careful burger chain that is affordable for all. Mr. Varona is an HRM graduate who worked on a
though, really hot items tend to go fast so make sure to grab a good deal when you see cruise ship and was an OFW. Currently, he is the owner and president of Zark's Burger.
it because it might not stick around. If there is only one item left at 30% off, the odds of What makes this burger house different from other restaurants is that the owner
it making it to 70% or even 50% off are slim, so there are some instances where you himself loves burgers and served as its inspiration in putting up the restaurant as a
will want to buy an item sooner rather than later. (Christy (n.d.). All Things Target. whole. Aside from that, this burger house also offers affordable burgers that are
Retrieved from https://www.allthingstarget.com/ markdown-schedule/) equally delicious compared to known fast-food chains like Burgoo and Fridays. The
success of this burger house is also because of the owner's efforts, he does not only
In using MARKET DEMAND-BASED PRICING, see and consider Zark's Burgers as a business but more of a passion or hobby. ALL TIME
there are several examples of demand-based pricing that can be seen in a FAVORITE P19 P159 The picture on the previous page shows the menu of Zack's
variety of products, companies, and industries. One example of this is Walt Disney Burger, their menu price is more expensive than the Burger King. The lowest price cost
World in Florida and Disneyland in California, which now increases their ticket prices P119.00 unlike the ther one which is just P39.00 and the highest cost ₱319.00
during holidays and certain weekends, in contrast to times when there is less demand. compared to Burger King which only cost ₱99.00
The Walt Disney Company introduced demand- based pricing at its US parks, which
means guests who show up on busy days will be asked to pay even more per ticket. A In using MAXIMUM MARKET SKIMMING,
single-day ticket for Disneyland in Anaheim, Calif. is currently $99. Under the new plan, when iPhone 4s was introduced in the market 4 years ago, its price was
that price will vary daily based on the estimated number of guests-$95 on "value" days, huge. Few people could afford an iPhone. With time, prices of the iPhone 4s have
$105 on regular days, and $119 on peak days. Peak and regular days make up 70% of decreased gradually, such that nowadays many people can afford an iPhone. The
the calendar. In the U.S., other theme park operators have also embraced this type of strategy that Apple is using is known as the skimming pricing strategy. Apple is only
pricing such as Universal Studios. Besides, demand-based pricing is also utilized in the just an example of one of the companies performing skimming pricing, but the list can
lodging, airline, and restaurant industries. go on and on, especially in the electronics industry. As it can be understood from the
iPhone example, the strategy that Apple is using consists keeping the highest initial
price that the first customers will pay and as soon as the demand of the first customers digit carries more than 50% of the information because 300 represents more than 50%
is satisfied (commonly known as innovators group), the company will lower down the of the price, meaning that the consumer will read and understand this figure clearly.
prices over time. But if that in a matter of perspective, then it wouldn't buy an iPhone Since the second digit (90) carries about 40% of the meaning of the price, the
now because it will be inferior to the current iPhone. This can be one big disadvantage consumer will read this number too. Then, the third digit (9) carries only 2% of the
of the skimming pricing strategy, as the companies can develop negative publicity if overall price information and is therefore, less relevant. In this case, the relevant price
they lower the price too fast and without significant product changes. The initial for the consumer is 390.00, depending on the desired relevance threshold. Walmart's
purchasers can feel frustrated and ripped off by the changes in prices for the same Pricing Strategy: k Low Pric Low Price 99 $297 Low Prices Every day They use an
product that they have purchased at higher costs. The ones that are initially targeted 0.75/.97 ending on their pricing. Again they are trying to convey a lower price. They
are the early adopters, and when the product reaches into the maturity stage prices know that the other retailers are using $19.95, so they use $19.88. It sounds cheaper.
drop to target the more price-sensitive segments. The word-of-mouth is also a useful It looks cheaper. It is cheaper. The middle class vanished, the cost of living has
part, as the early adopter will also play the role of spreading the news and convince continued to increase, and people simply have less money than they used too. In
relatives and friends to purchase the respective product. Sony PlayStation 3 The addition to that is widespread in using online shopping where prices can be changed
PlayStation 3 was originally sold at $599 in the US market, but it has been gradually instantly at any time during the day. According to a 1997 study published in the
reduced to below $200. DVD players Initially in the 1990s when DVD players were Marketing Bulletin, over 90% of prices in advertising material ended in an odd digit
launched, the price of a DVD player was $500 and $400. By 2001 the prices were (9,7,5).
skimmed to less than a $100. By 2004 DVD players available for as low as $50 or $60.
In using ONE PRICE POLICY,
In using MULTIPLE UNIT PRICING, Ukay- Ukay - is a combination of factory overruns and local and imported
it is a method for setting the item price for each successive unit of an item secondhand clothing. It is sold cheaply by vendors in ukay-ukay hubs and stores. It is
sold when multiple units are the same item are sold. The item price is set on an item- the Philippine version of thrift clothing stores. Thrift shops have been around for such a
by-item basis. Multiple pricing is not a discount; it nultiple unit pricing. specifies the long time and shopping from them is a great way to support sustainable fashion while
regular selling price of each item eligible for the mul It is not a mix match pricine staying within budget. What makes thrift shopping even more exciting is the fact that
scheme, which sets the price for a collection of ite rather than each item. This is a can score such cool, unique pieces that probably couldn't find at the nearest fast
Multiple Unit Pricing in a supermarket Wherein the price is 6.99 for a 24pk tray of fashion brand. This is a great example of One Price policy since the products are sold at
Pepsi Cola and the customer will save a 5.50 each. When a customer buys a bundle of the same prices whether it is different in forms. Piso Net - A mini type internet or
that product they save can more. The strategy of Multiple Unit Pricing is used either by gaming vending machine. It is a major hub for internet enthusiasts and children who
organizations or E9.00 29.00 E9.00 retailers to push their products for higher sales. only have a small amount of money to surf and play some games which more
Higher sales are targeted to achieve higher market potential and higher conversion of contributes "demand" to the business since it is a "One-peso coin or other coins" for it
the customers. Usually, this is implemented during large sale days, which are coupled to operate. 204 1049 as advertised sale Special 599 399.99 sale sale Coca'Cola Abox
with festival days or other shopping days. The price is reduced with the bulk purchase, 360 Final Fantasy Xlil Special Edition Bunde Too barddheent Fru fartayy
and the customer is shown about the drastic reduction in price and the price benefit
which he will be achieving. Higher sales are also a concern in the case of target In using OPTIMIZING MARKDOWN DECISION,
achievement when the target of the sales team is to be achieved, and the duration for PureGold is an example of a company at uses a strategic method to
Sales closing is very less, in such cases, high sales become a priority, and Multiple-unit markdown prices of their goods to clear out space for products more attractive to
pricing is used. Pepsi Multiple-unit pricing is used to push its product for higher sales. consumers, a business may reduce selling prices to encourage bargain shoppers to buy.
Higher sales are targeted to achieve higher market potential and higher conversion of This also helps their business minimize losses en products with low consumer demand.
the customers. 699 Higher sales are also a concern in the case of target achievement. PureGold has a card wherein the can save n the bills on water, electricity, telephone,
Multiple unit pricing is also used in case of customized deals. When there are bulk etc. Just buy participating products to get a coupon that can be used at the Puregold
orders and customized deals, the buyer expects a better price on the products. Few Bills Payment counter. Just buy P1000 worth of participating products to get ₱100
free units are coupled with the order to reduce the per product price, thereby discount on bills. They also launched their loyalty program, which was eventually
implementing Multiple Unit Pricing. It is used in customized deals in case of dealing renamed "Tindahanni Aling Puring" in 2004. Puregold continued its expansion at an
with supplier-manufacturer deals. For example, the deal is that on purchase of 100 average of 3 new stores every year and established operations in North and South
units of a certain product, the supplier will get ten units for free of cost, the buyer can Luzon.
propose a deal of buying 500 units of products at one time and request for 60 units
free. This pricing strategy is the single greatest lever that has to improve profitability, In using OPTIONAL PRODUCT PRICING,
and profits will increase further when it is price strategically made. It sets a product's Cebu Pacific Airline Flight Selection is a Philippine low-cost airline based
price based on the product's value to the customer, or on competitive strategy, rather on the grounds of Mactan-Cebu International Airport, Lapu Lapu City, Metro Cebu, in
than on the cost of production. the Philippines. It is Asia's oldest budget or low-cost carrier airline, founded in 1988.
Cebu Pacific airline used Optional Product Pricing Strategy offering additional baggage
In using NON-PRICE RESPONSES COMPETITIONS, and meal that comes with a price when customers book a flight. Apple Inc. is an
McDonald's, the American hamburger and fast food restaurant giant uses American multinational technology company headquartered in Cupertino, California,
a wide range of both non-price and price competition. It claims to buy coffee beans that designs, develops, and sells consumer electronics, computer software, and online
that are 'fair trade' and have the 'Rainforest Alliance Group' seal of approval. This is an services. Apple Inc. used Optional Product Pricing strategy in upselling and cross-selling
effective way for McDonald's to boost sales because it does not have to alter the price upgrades or accessories for its product Pro Display XDR as shown in the pictures.
of the cups of coffee it sells. In nearly every McDonald's restaurant across the globe
today, offers free Wi-Fi. Through bulk-buying and negotiating a lower price for the In using PENETRATION PRICING AND NON-FINANCIAL
purchase of several internet connections, the company has been able to increase sales HBO Objectives, Utility Companies (Television and Internet providers)
without the need for the high costs involved with a major advertising campaign. Television and Internet providers are notorious for their use of penetration pricing -
Regarding McDonald's, the New Zealand Qualifications Authority writes: M PPLEPIE "By much to the chagrin of consumers who see massive sudden increases in their bills.
differentiating their product McDonald's doesn't need to make major changes to its Comcast/Xfinity, for example, regularly offers low introductory prices such as free or
products. McDonald's constant endeavor to improve New Zealanders' opinion has steeply discounted premium channels. At the end of a specified period, the price
caused them to switch to free-range eggs and so create for themselves a lasting image increases. Most consumers continue paying the higher bill, but some jump to a new
as a company that considers animal welfare to be important. Pharma companies abp provider offering an introductory rate. Other utility providers also rely on penetration
transition AMGEN ATKEARNEY Fhomnaldirteen AstraZeneca 2 MERCK SERONO Roche pricing. In a market increasingly dominated by smartphones, providers of landlines
O conceBtra NHS sunolaventis Pharma Business U. NOVARTIS Wyeth The may use penetration pricing to get consumers to purchase a landline. Some even
pharmaceutical industry is full of brand name products and generics which become bundle these deals alongside cable, internet, and smartphone packages. DVD Rentals
available when the active ingredient's patent has expired. Companies face strong (Netflix) A Friday night trip to a video or DVD rental shop was a family NETFLX tradition
pricing competition from businesses that manufacture generic equivalents of their across the nation for at least a generation. When Netflix entered the market, it had to
brand-name medications. However, in virtually every case, the brand-name owner convince consumers to wait a day or two to receive their movies. To accomplish this
avoids reacting with pricing strategies, and instead uses a non-price competition goal, it offered introductory subscription prices as low as a dollar. The pricing strategy
marketing approach. For example, the brand name Tylenol is owned by McNeil was so effective that traditional providers such as Blockbuster soon were edged out of
Consumer Healthcare, a subsidiary of Johnson & Johnson. Even though the active the market. Food Companies (Stax) Lays Many new foods introduce themselves to the
ingredients and dosages of Tylenol are the same as its generic equivalents, marketing market with a penetration pricing strategy. Some businesses even give packages of
the brand name's quality and superiority still works and results in healthy profits. new products away by, for example, sponsoring events and providing sample packs to
attendees. In one notable such example, Frito-Lay introduced Stax to the market in
In using ODD PRICING, 2003. The brand was a direct competitor to the well-established Pringles line of chips.
this is the example of two firms that use odd pricing strategy. The first To draw more business, the company offered the chips at a steep discount of $0.69 per
one is the XBOX 360 by MICROSOFT, they used odd numbers as the ending of their canister. This earned the brand prominent display locations at many retailers. When
price 399.99. The second firm is COCA-COLA, they also used an odd number as the the chips had fully penetrated the market, the price quickly rose to well above $1.
ending of their price per pack. They used it as a trick to the buyers that intently to look Penetration Pricing Nintendo Nintendo adopted a market-penetration pricing strategy
cheaper than the other choices. The odd pricing strategy relies on the fact that for its latest console, the Wii. The Wii was priced at $249.99 at launch, much cheaper
consumers highly value their time when evaluating prices. There is an increasing time than the 360 and PS3. This pricing strategy as well as its innovations is the main
cost associated with examining each additional digit within any given number, which contributor to its success. It currently holds the largest market share among its
means that when examinins a price, the first digits carry more weight than the last competitors. Nintendo issued only one price cut so far, in 2009, lowering the price of
ones. The relevance rate fo each digit and hence define the two concepts of "perceived the Wii to $199. (Jacinto, J. (2010). New Product Pricing Strategies. Blogspot. Retrieved
price" and "true price". A consumer needs to evaluate the price of 399.99. The first January 10, 2020, from http://uwmktg301.blogspot.com/2010/03/new-product-
pricing- strategies.html) Penetration-Based Pricing Walmart Walmart has the largest A Strategic Planner for Marketing Professionals" Canada. Probus Professional Pub.
market share in the retail industry, they are having more numerous retail outlets all Page 71) (Walter, W., (2018) "Prestige Pricing: Pros & Cons and Examples" Retrieved
over the world than anyone else. Walmart started entering into a new market to from: http://inevitablesteps. com/marketing/prestige-pricing/) Mention the brand
increase market share, they used penetration pricing strategy while entering LOW Uniqlo 10 years ago to anyone outside of Japan and you would get a confused look.
PRICES into a new market where they found high competition. The company invested Mention Uniqlo to any global citizen today and the associations of quality, affordability,
$498 nothing in sales promotion; instead, they came up with the lowest price retail and fashionable come to mind immediately. That is how successful Uniqlo has become
outlets by reducing operational and stringent control on expenses. Walmart Walmart in recent years. It has become yet another contender in the global fast fashion retail
uses Penetration Pricing in its products, they use this occasionally in the Quarter sale, market. Despite having to compete against other bigger players like ZARA (Inditex),
Christmas sales, etc. That many customers grab this opportunity. Jiran, K. (2015). H&M, Gap, and Forever21, Uniqlo has still managed to grow at an astounding pace.
Walmart's Exhaustive Strategies market Penetration Re- trieved From: How did it manage to capture a share of this competitive fast fashion retail market so
https://www.coursehero.com/file/p41odh9/Walmarts-Exhaus- tive-Strategies-Market- quickly? Some of Uniqlo's key brand success factors include its unwavering
Penetration-According-to-Walmart-2013-the/) commitment to innovation and its company culture. Its Japanese founder, Tadashi
Yanai is famous for his quote "Without a soul, a company is nothing". This soul is
In using PENETRATION PRICING AND NON-FINANCIAL OBJECTIVES, reflected in the 23 Management Principles that Tadashi Yanai has created and
here are other firms that use penetration pricing strategy. They serve as indoctrinated in every Uniqlo employee. The essence of these principles includes
proof that using the said strategy will provide a great benefit to your company. Utility putting customers first, giving back to society, and being self-disruptive. (Brian, L.
Companies (Television and Internet providers) Television and Internet providers are (2019) Uniqlo - The Strategy Behind the Japanese Fast Fashion Retail Brand. Retrieved
notorious for their use of penetration pricing - much to the charging of consumers who from https://martinroll.com/resources/articles/strategy/uniqlo- the-strategy-behind-
see massive sudden increases in their bills. Comcast/Xfinity, for example, regularly the-globaljapanese-fast-fashion-retail-brand/)
offers low introductory prices such as free or steeply discounted premium channels. At
the end of a specified period, the price increases. Most consumers continue paying the In using PRICE SENSITIVITY,
higher bill, but some jump to a new provider offering an introductory rate. Other utility Buko Coco is one of the popular food cart businesses. It was established
providers also rely on penetration pricing. In a market increasingly dominated by to give a smooth and refreshing taste of fresh buko shakes and ready to drink juices.
smartphones, providers of landlines may use penetration pricing to get consumers to Go grab one with a dash of pandan, milk, and others. It is a customer and a service-
purchase a landline. Some even bundle these deals alongside cable, internet, and oriented company that boasts of wide logistics nationwide. Customer concerns are
smartphone packages. Perceived Value Pricing Siomai House was one of the food addressed promptly, and they have open communications with the business partners
products offered by BERNABEST FOOD PRODUCTS INC. that offers steamed pork and and personnel. These are practices that ensure the maintenance of the quality of the
shrimp siomai, matched with banana cum pandan flavored gulaman. Furthermore, stores in every aspect including service training, operations, and product
their siomai is served with a uniquely concocted chili-garlic sauce that makes it more standardization. The price of one bottle of buko loco is P35 which is the small one and
appetizing. The pricing strategy of the Siomai House is based on their popularity and can also buy the big one which the price of P109. They offer different flavors that
what the target market is perceived on their product. Since Siomai House is one of the customers would like such as pandan, ube, halo-halo, and others. Buko juice is one of
popular food stalls because of its taste and mouth-watering flavors like chicken and the best and healthy drinks. The buko juice can be drink anytime especially during
pork, the target market or customers are willing to buy their products at any cost. snack time. It is a good and healthy drink. Buco juice can be prepared with so many
Periodic Discounting On October 18, 2019, Brownies Unlimited celebrated their 31st different types of flavors, for only P10 each for the small one and can be range up to
Birthday. Now to give their customer a blowout, they are giving the box of 4 brownies P20 for the big one. One of the Flavor there is ube- macapuno which is very delicious
for only ₱31.00 in which the original price is Php 85.00. This promo is limited for one and will satisfy thirstiness. Buko Coco is a little expensive so its demand is not that
person only and can be acquired by 2:00 pm to 5:00 pm only. This type of discounting high. Based on this product, when the price is high its demand is low. The price of a
is periodic or discounting during special events. Because Brownies Unlimited wants to certain product has a great effect on the demand because most people will buy an
be recognized by their customer, they promoted it by giving this kind of discount to affordable product and have a low price.
gain profit. They lower down their price so that the customer will patronage them.
When businesses are giving a discount like this, people are driven out to buy In using PRICE DISCOUNT AND ALLOWANCE,
something like this because of the lower price offer. This may also refer to impulsive Fast-food Chains uses also this kind of pricing strategy which is price
buying in which this is not supposed to be in their budget bet because of the promo discounts. It may appear through their value meals which offer any different foods at a
they are urged to buy. Apple has updated its flagship smartphone this October 4th, cheaper price. ALL HARSARE 65 15 Another example is Happiness Tummy. They offer
while dropping their prices of the two proceeding models (iPhone 4 and iPhone 3GS). this unlimited all in one for Only P299.00 per head which contains unlimited Samgyup,
By this Apple is trying to reach more price- sensitive costumers and clear their stocks. Nachos, Wings, Fries, and Milktea. The strategy that they used is that, they know that
In this particular case, Apple also tries to lower the peak demand for their newest not every customer can eat a lot so they used the word "unli" to attract customers to
model as Apple has already experienced many supply shortages due to the buy their products.
overwhelming demand for their newest products In the case of technological products,
their new product cycle is generally one year. So customers know that each year there In using PRICE DIFFERENTIATION,
will be another (newer and slightly different version) phone and that the older version it enables companies to profit from their customers' unique valuations by
will be offered at a discounted price. Note that those prices are for the devices with offering different customers different prices for the same product just like how the said
two years of contracts. Compare iPhone models. iPhone 45 IPhane 4 Phon 3G5 iPhone stores are offering different types of jewelry like rings. It is noticeable that price
prices for discontinuing models 5139 1935 5299 1/C 5512 642 differentiation when it comes to jewelry just like rings vary mostly on the customer
segments or who are their target market. Like if the target market is in the middle-
In using PREDATORY PRICING, lower class, people tend to buy products that are more budget-friendly and could still
this company is one of the examples that use predatory pricing. They are be used in the long run just like what JustGift and UniSilver are selling because they
claiming that Uber has used its ROYALTY billions of dollars in funding to undercut have this lower-cost but pretty items. And the said stores also got higher prices items
competitors with predatory pricing, losing money on every UberX andUberXL ride in good for higher quality seeker customers. They have designated prices based on who is
San Francisco "with the expectations of reaping extraordinary future returns." their target market and the items on the same class but with different specifications.
Ridesharing startup Uber has run roughshod over traditional taxi businesses across the The range of prices created by differential pricing contributes to the pricing windfall
country. One San Francisco taxi company is now fighting back in court. Flywheel Taxi with larger margins from higher prices and growth by using discounts to sell to more
(formerly DeSoto Cab) sued Ubert U.S. District Court. Amazon famously barely turned a customers. In Unisilver prices of a ring, accessories range from P450 - P.1400
profit in its first twenty years, and even today nearly all of its operating income comes depending on the designs and concentration of materials used. While on JustGift prices
from cloud-computing service Amazon Web Services. To hear CEO Jeff Bezos tell it, are quite similar to Unisilver which also ranges from P240-P500 depending on varieties.
Amazon focuses relentlessly on customer needs, serving as a kind of charity run for the F&C Jewelry and Gems and Jewels have this classy look from their physical store up to
benefit of its users. Many critics have offered a more sinister theory: Amazon has spent their respective items. Rings costs around a ₱5,000-P20,000 depending on the class as
the past couple decades building up market share by under pricing competitors, and they also offer not just silver accessories but also gold and other gems. It is noticeable
someday, when there are no alternatives left, it will become fabulously profitable. that jewelry shops JustGift and UniSilver have this price differentiation strategy to
Amazon is lying in wait, in other words, to become a monopoly. The technical term for reach out to lower-end customers. JustGift products are mostly made som stainless
this is predatory pricing, and. it's illegal under U.S. antitrust laws. Dropping prices with steel and the UniSilver sells silver products. And based on the survey lducted, their
the intent to monopolize. STARBUCKS COFFEE Starbucks Coffee uses fancy interiors, stores can be located at places or malls with a vast number of lower- ed customers to
terms like "barista", "venti" and "grande" as well as the use of the green mermaid are place their products. They offer different varieties of jewelry that wre much more
all superficial RBU that is added to the experience of PRESTIGE PRICING. But the thing affordable products to be sold in the market. Meanwhile, the F&C Jewelry which is
that made Starbucks a premium coffee brand was the price. Coffee used to be a dollar located at the SM Department store Jewelry section sells high-end old rings with
cup. Then Starbucks started charging almost four imes as much. Starbucks created a different karat concentrations. Their target market is obviously for the higher end
new category of premium coffee, one they still dominate today and all those added customers as their prices are quite expensive and meant for lavish. Same goes with the
features contribute to the higher price tag. APPLE INC. Apple strategy is based on the Gems and Jewels that sells gold pieces of jewelry with different karat concentration
skimming method which means pricing the product at a high price to get profit. But it where they also based their pricing strategy.
follows this only in the introduction stage for their products. Apple has a multi-
prolonged strategy that encompasses offering a small number of products, focusing on In using PRESTIGE PRICING,
the high end, priority to profits over the market share, create such an effect of the Nike is a perfect example of a company that effectively uses prestige
product which makes people starve for new. The sales of Apple have increased by 23 pricing, which is a pricing strategy where prices are set higher than normal because
percent as against 46 percent for Samsung. Apple products may still be good in quality lower prices will hurt sales. If customers value the image of the brand and the features
but in many countries, it is considered expensive than other alternatives like Samsung, of the product over those of the competitors, then prestige pricing (also known as
Google, Amazon, and many other vendors. (Seymour, D. (2017) "The Pricing Decision: image pricing) can help capture value despite the production costs or quality of the
product. The theory is that customers will pay higher prices for the right image and increases. The Apple product is Inelastic and even if they increase the price the
won't investigate whether the price accurately reflects the value. In Nike's case, the consumers will still buy the product at any price and there will be a small decrease in
brand is what communicates value, not the specific nature of the product. Prestige the percentage of the demand towards the Apple products even though there is an
pricing can give companies a psychological marketing advantage by convincing alternative phone that makes the product elastic, the consumers are still willing to pay
customers there is added value for the cost, and it takes advantage of the buyer's the price at any cost just to have an Apple product that makes the product inelastic.
assumption that one brand's product is of a higher quality than the competitors We say a good or product is price inelastic when an increase in price causes a smaller %
because it costs more. The decision-makers in the company pursue prestige pricing fall in demand. Other examples: Salt - If the price of salt increased, demand would
which is a strategy that allows them to appear as though a premium brand selling largely be unchanged. It is only a small % of income and people tend to buy
premium products. In some cases, brands that pursue this strategy are truly superior infrequently. It is good with no real substitutes at all. Meralco - A good produce by a
to their competitors. Usually, however, the level of the quality difference between the monopoly is likely to be inelastic demand. This is due to the demand will remain there
premium brands and the others doesn't reflect the difference in their prices. Rather, and no alternative or choice to purchase or pay for the price even if it MERALCO
even if the products are similar, prestige prices are significantly higher than the market increases
average. Not for all, but prestige pricing might be the best strategy for at least some of
the other products. In using "PRICE ELASTIC DEMAND".
ELASTIC DEMAND, SHELL PETROL For example: If the price of diesel
PRICING BUNDLING increases by 20% and there is a great or huge fall in the percentage of demand by 50%.
On the other hand, It is said that fast-food restaurants are also engaged in Using the formula: Price Elasticity of Demand (PED) =% Change in Quantity Demanded
bundle pricing quite frequently. They may call it a value meal or a meal deal. A % Change in Price PED = 50% 20% 2.5 If the result is greater than 1 it is elastic. The
customer can purchase a sandwich, fries, and a drink as a value meal for far less than demand for Shell products such as diesel is price elastic. Meaning the elasticity of the
the price of purchasing each item separately. One of the well-known fast- food product is elastic that not all the consumers will still buy at shell because of the price
restaurants here in the country who apply pricing bundling as their pricing strategy was increases. Based on the PED, the Shell product, which is diesel is elastic, meaning,
the Mc Donald's, who offered the McChicken, McDouble sandwiches, McSpaghetti, there are still alternatives than buying at Shell, like Caltex, Flying V, Petron and so
McBurger fries, and drinks. McDonald's pricing strategy involves price bundling much more that offers the same product that Shell has that causes huge fall in the
combined with psychological pricing. In price bundling, the company offers meals and percentage of demand. Price elastic when an increase in prices causes a bigger % fall in
other product bundles for a discount. Some of the meal was called a 'Happy meal' for demand. The only exception is if a petrol station has a local monopoly - e.g. at the
kids who has food and toy as well that captured the interest of the children. While service station on the motorway, there is a captive audience. But, in a city center with
there is what we called a 'Budget Meal' for those who have a small budget yet wants to many alternatives, people will have an elastic demand. Other examples: Porsche sports
have a two or more meal in one plate. And lastly the 'Bucket Meal' was a big set of car - If a Porsche increases in price, demand will probably be elastic because it is a high
meals that is good for sharing or good for a family who likes different meals at one % of income, and so the higher price will put people off. Also, there are other
price In psychological pricing, McDonald's uses prices that appear to be significantly alternatives, such as Jaguar or Aston Martin. at Kit Kat chocolate bar - If Kit Kats
more affordable, such as $99.99 instead of rounding it off to the nearest dollar. This increases, people will switch to alternative types of the chocolate bar.
element of McDonald's marketing mix highlights the importance of price bundling to
encourage customers to buy more products. McDonald's itself is vague about its In using "PRICE EXPECTATION",
pricing strategy; the company understands that a customer's perception of value is an Apple forecast tops estimates on expectations consumers will snap up
important determinant of price charged. Using low price as a marketing tool may iPhones, wear wearable devices. Apple projected sales that beat analysts' estimates,
promise customers a product of compromised quality. Moreover, competitors can suggesting consumers continue to snap up the company's high-end iPhones, digital
respond in a price war resulting in profit margins reduced without increasing sales. services, and wearable devices like Air Pods and the Apple Watch. Apple shares rose
2.4 percent in extended trading on Tuesday. The stock closed at US$190.29 in New
In using PRICE CUES, York and has gained 12 percent this year, moving Apple closer to becoming the first US
Fariñas Ilocos Empanada is a favorite for many of us. Their store is serving Company with US$1 trillion in market value. More than a decade after its debut, the
up hot and crispy savory pies filled with miki noodles, mung bean sprouts, fried egg, iPhone is still Apple's most-important product, accounting for about 60 percent of
bagnet, and longganisa for dine-in and take-out. Their empanadas are a regular best- revenue. While unit sales have slowed recently, the company is building digital services
seller. One can choose anything from an ordinary empanada, containing an egg and and a suite of other gadgets around the device. Those newer businesses, along with
mung bean sprouts, for P45 to an ultimate empanada with everything in it for P99. One higher iPhone prices, have supported revenue growth. iPhone 6 Phons 7 #349 1449
can also opt to add cheese for an additional P10. Each empanada is cooked upon 1549 *699 999 Apple's fiscal fourth-quarter outlook is closely watched because this is
order, ready to eat in about five minutes and the empanadas are delicious and usually the period when the company unveils new iPhones. The company is expected
perfectly cooked. Mama Dang's Empanada is one of the best and delicious empanada. to launch three new phones later this year. That's raised Wall Street expectations for
The empanadas can be eaten for breakfast, lunch, and dinner. They can be served as more sales and profit. The results "were driven by continued strong sales of iPhone,
appetizers or snacks, but they can also easily make a full and satisfying meal. It is a very Services, and Wearables, and we are very excited about the products and services in
versatile dish. These delicious bundles can be prepared with so many different types of our pipeline", Tim Cook, Apple's chief executive said in a statement. More than a
fillings, for only P49 each. One of the fillings there is the cheese flavor or filling that is decade, Apple still manages its image as the world's leader in terms of making
very delicious and will satisfy your cravings. MAMA DANG'S * EMPANADA Those two smartphones. Apple still reigns as the Rolls Royce when it comes to gadgets. As we all
are both business that has a product specialty which is empanadas, however, when we know that most of the Company's offers are so high end, so we are expecting that the
will talk about the prices of product they do not have the same amount of prices prices are high. But the question is? How Apple still manage its stability as a company
though they have same pricing strategy and a goal of to have an income or profit. and its images of being world-class? The price expectation of every customer and user
Farinas Ilocos Empanada has a cheaper price compare to Mama Dang's Empanada, one in the whole world about the iPhone is costing high, but they know that this phone is
factor that can be considered is the location of the business, I can say that it is much offering world-class in all its specs. That's why many people around the globe are still
comfortable at Mama Dang's Empanada place. The Price of Mama Dang's Empanada patronizing this smartphone because they believed that their money will not be
will be much cheaper if ordered many because they accepted boxes of order compare wasted even though it is costly when they buy this smartphone.
to Farinas Ilocos Empanada they do not offer or have a box for their orders because
they most likely sell it per piece. In using PRICE FIXING,
Unilever is a British-Dutch transnational consumer goods companyco-
In using PRICING DISCRIMINATION, headquarteredinLondon, United Kingdom,andRotterdom,Netherlands. Its products
each flight the passengers have paid different prices, and that in some include food and beverages, cleaning agents, beauty products, and personal care
cases can observe that the highest price is as much as Philippine Airlines five times the products. It is Europe's seventh most valuable company. This product contains the
lowest price. Is price discrimination a good or bad thing for airline passengers and same intension for all us to maintain our clothes look good and smells good they have
society? To answer such a question, one must focus on the price discrimination that is their scents and fabric. The given SRP for us to remember that the price is fixed and it
most common in this industry. A casual observation would be that there are numerous tells me that it is the original price of the product. The following are the original price
different versions of an airline ticket to choose from. One can buy an expensive, First is the SURF POWDER DETERGENT given (SRP is P5) Second is TIDE POWER
flexible ticket. Then one allowed to reschedule the flight or even cancel it without any DETERGENT (SRP is P6) lastly is ARIEL POWDER DETERGENT given (SRP is P7.50). All
costs. Or can buy a cheap ticket, with many restrictions. For example, a Saturday night these three detergent powder like a Tide, Surf, and Ariel infuse your clothes for a
stay-over is required and so is advance- purchase. Since every passenger can choose brilliant clean and freshness, with burst after burst of uplifting fragrance. The same
between different versions of an air ticket, it is natural to consider the theory of amount of 50 to 70grams each of sachet and its price are somehow so far and some
versioning when analyzing the price discrimination in this industry. are a well-known brand. I realize although Surf is the smallest sachet it does have the
most sales and brand awareness due to the different variety of choices and also the
PRICE ELASTICITY Ariel one because of its quality and price. It can't be sold like Tide and Surf because
The Apple brand already made an established image in the market that Ariel is too expensive for the quality. The Surf and Tide powder detergent seem to be
the consumers patronized their product and they have already gained the trust of the competitive at the pricing set Surf powder sold for P5 and Tide for only P6 Tide and
consumer. It is a strong brand that many consumers are willing to pay a premium for Surf SRP are affordable. Surf has a promo of a bulk or a dozen and one free sachet for
an Apple product. 509 699 *999 1099 For example: If the Apple Company has a price of each dozen for only P58. The idea of giving discounts and promos is to easily attract
30,000 in a certain apple product and increases the price by 50% which is 45,000 and and get the attention of the customer to have more sales. Tide Dacon
there is a small fall or decrease in the percentage of demand by 10%. Using the
formula: Price Elasticity of Demand (PED) =% Change in Quantity Demanded % Change In using PRICE LEADERSHIP,
in Price PED = 50% 10% 0.2 If the result is less than one or equal to one, it is inelastic. many firms use price leadership to gain more profit and to gain more
The demand for the Apple Brand is price inelastic. Meaning, Inelasticity of a product is market share. This control can leave the leading firm's rivals with little choice but to
the responsiveness of the consumer's willingness to pay the price even if the price follow its lead and match the prices if they are to hold on to their market share. Price
leadership is common in oligopolies, such as the airline industry, in which a dominant premium channels. At the end of a specified period, the price increases. xfinity Price-
company sets the prices and other airlines feel compelled to adjust their prices to Quality Inferences Cite other firms who did the same pricing strategy (show pictures of
match. Picture City that was discussed earlier, Bajaj Auto is one of the best examples in the product) or existing best practices of the company Others firms that use Pricing for
Price Leadership. It is an Indian-based company which is known in their auto 2020 market penetration are: *Smartphone providers like Oppo OPPO F5 In using Price
wheels. In India, they have taken the risk to be the price leader in the motor industry Taker, SM Investments Corporation (SMIC), also known as SM Group, is a P4,950 -
and look at now even in other countries like the Philippines which is very popular as Philippine conglomerate with interests in shopping Used : P7,000- mall development
well. Bajaj Auto has also led the pioneering introduction of India's first-ever and management, retail, real 4.1 30 reviews estate development, banking, and
Quadricycle - Qute. Bajaj Auto exports to 70+ countries and a significant share of tourism. The company is also selling carrots and other vegetables in their supermarket
revenues come from Exports. This stands as a testament to the new brand image - The however it is much higher than what the product is worth. However, many consumers
World's Favorite Indian. In 2007, Bajaj Auto acquired a 14% stake in KTM that has since buy it because they think that it is the real value of the product the same with their
grown to 48%. This partnership lyzed Bajaj Auto s endeavor to democratize motorcycle other product. The company is reselling a different kind of product in its markup but
racing in India. Bajaj Auto todadwide. In FY2018, KTM was the fastest-growing still somehow not too much higher in the prevailing market price to avoid conflicts.
motorcycle brand in the country. exclusively manufactures the Duke range of KTM And to that, they are using a value-based product which makes the consumer believe
bikes and exports them THE WORLD'S FAVOURITE INDIAN that their pricing is the real worth of the product they are buying. Value-based pricing
is a strategy of setting prices primarily based on a consumer's perceived value of a
In using PRICE LINING, product or service. Value pricing is customer-focused pricing, meaning companies base
Apple creates different price points for their price lining strategy according their pricing on how much the customer believes a product is worth. Value-based
to the models that they're offering. For example to this is, Apple offers three latest pricing is different than "cost-plus" pricing, which factors the costs of production into
models which are iPhone 8, iPhone 8 plus, and iPhone X. Each of these phones has the pricing calculation. Companies that offer unique or highly valuable features or
different features. The iPhone 8 is the handiest of all, the iPhone 3Plus is bigger and services are better positioned to take advantage of the value pricing model than
comes with the dual camera feature and lastly, iPhone X is the anniversary phone and companies that chiefly sell commoditized items. It is the best pricing strategy for this
the most unique of them all and has the most powerful camera. Here's how Apple kind of product because since the supplier of the product is the price taker they have
using the price lining. Each phone is priced according to its features. An iPhone 8 starts no choice but to accept the prevailing market price. However, the reseller can mark up
P30,990 where iPhone 8 plus starts P36,990. The iPhone X has higher prices which are his/her price in which the people will think that it is truly the price value of the product
starts from P56,556 since it is the best phone and has the best unique features. The not knowing that the seller bought it at a much cheaper price because some of us does
idea behind these prices is to create interest to the consumers who will notice those not know what is the prevailing price of the product we are buying and the Value-
gaps between the prices, features, and the quality of the product. Another example of based pricing strategy will be effective as long as the consumer believes that the
companies that uses the price lining is offering the internet. Globe, Royal Cable, etc are company's pricing is the product truly worth. CURAO
offering different internet connection features such as 3mbps, 8 Mbps, 12 Mbps, and
the higher Mbps is 50mbps. These internet plans based on their specification are being In using PRICE TRANSPARENCY,
priced based on their features. The higher the Mbps you get the higher the price you many products have these kinds of situations also. Same usage with
will pay because it has the best features that they offer. Consumers are giving an different styles, designs, materials, quality, and performance. One example of this is
option based on their capability and the required budget they have. Most of the the burger. Burgers tend to have different prices because of its ingredients and how it
companies are doing this kind of strategy like Apple, is made. Mcdonald's and Angel's burgers have a few dissimilarities in terms of
ingredients used, the procedure of cooking, and the ambiance of the store. Mcdonald's
In using PRICE-OFFS, have more components such as lettuce, pickles, tomatoes, dressings, onions, and of
many customers believe that Amazon offers at or near the lowest prices course, the well-heated buns and 100% beef patty. While in Angel's burger, the burger
on a broad range of goods, even when that's not the case. Amazon strategically selects has few components. The burger consists of typical buns heated in the same pan
the products, such as best-selling items, on which to compete aggressively and charges where the patty is cooked making it greasy and oily, mixed with mayonnaise and
relatively more on others. In one study, Jet. com was cheaper than Amazon by 27%. ketchup dressing and thin patty. It is the same for the ambiance of the store.
Intense competition on pricing pervades many industries, which makes consumer McDonald's provides a big space with tables and chairs for dine-in customers while
perception more important than ever. Aggregator and comparison websites have Angel's burger has few chairs in the counter of the stall and it can also be seen in
brought greater price visibility and ease of product comparison to banking, insurance, roadsides and busy areas outside such as markets.
hotels, and other consumer markets. It's also easier for consumers to split their
spending among different providers, depending on which firms offer the best In using PRICING OPTIMIZATION SOFTWARE,
perceived price-value equation. Managing price perception, not just pricing structure one of the companies that also use Pricing optimization is Marithe +
and actual price points, thus has become a critical capability for firms in consumer Francois Girbaud and international apparel, wallet, and bags brand. Last month they
markets. Many people think Amazon is the cheapest place to buy any products. That's offer to buy 1 take 2 to all items here, but they are doing it every year. Since every
why the company has nearly half of the US e-commerce market share. But that month, the year is holiday season they taught of how they will optimize the prices of
suggestion is not accurate. Amazon offers the best deals for the most popular their product while emptying their inventory and having a great revenue. By gathering
products, but for the rest, it's a different story. The real success is forming a perception information considering the season, customer demand, and the supply that they have,
in shoppers' minds that the website is the cheapest destination for any product. the offer eventually tops up their sales and got rid of the items that will be paced out.
(Saricayir, B., & Basak. (2019, December 25). Price Perception: Directing & Influencing
Consumers.Retrieved from https://prisync.com/blog/price-perception/) The price of In using PRICING ESCALATION,
running shoes from different brands vary. Running shoes from branded stores at SM Togum Agricultural Development Company, Inc. (TADECO), one of the
City Santa Rosa are somewhat pricey and costly. However, some retail stores are highest yielding banana plantations in the world, is engaged in the production and
offering first-class or class running shoes at low prices. Examples of sales, discounts, export of fresh Cavendish bananas to Japan, Hong Kong, China, Korea, Middle East,
and price-offs are evident in a retail store in Royal Kicks at Barangay Canlalay, City of Russia, Malaysia, and Singapore under the Del Monte Brand name. It is the flagship
Binan, Laguna. They offer the same brand of shoes at affordable and low cost. For Nike company of the ANFLOCOR Group of companies. With more than 40 years in banana
running shoes, it can be usually bought of SM City at a price of P6,900. When operations, TADECO has maintained its world-class quality bananas following stringent
purchased in retail stores like Royal Store in Canlalay, this can be purchased at P1,999.
It is relatively cheaper than the ones in SM Store.

In using PRICE QUALITY POSITIONING MATRIX,

McDonald's Pie APPLE PIE RICH CHOCOLATE PIE McDonald's pie has been
on the chain's menu for 50 years, so it's pretty safe to say that it is a beloved dessert
and is made with a tender, flaky lattice-top crust with a sprinkled sugar topping. The
average price of each pie cost P35 but when McDonald's releases chocolate pie, it
immediately increases up to ₱50. Utility Companies Television and Internet providers
are notorious for their use of penetration pricing - much to the consumers who see
massive sudden increases in their bills. Comcast/Xfinity, for example, regularly offers
low introductory prices such as free or steeply discounted premium channels. At the
end of a specified period, the price increases. Most consumers continue paying the
higher bill, but some jump to a new provider offering an introductory rate. Globe
Telecom WiFi It was stated that "the Globe At Home Prepaid WiFi is a new product that
offers budget-friendly internet access at home, giving you 2X faster speed*, 2X
stronger signal and wider coverage* with no installation required and no monthly fees
needed". Gobr ATHOME Most likely the companies with giveaways and buy-one, get-
one sales encourage sumers to spend more money than they otherwise would. These
sales can also be example of penetration pricing. Manufacturers may contract with
merchants to ffer a new product for free with the purchase of a related product. The
manufacturer tomporarily loses money but does so in the hopes of creating interest in
the new roduct. Comcast Cable is one of the United States' largest video, high-speed
Internet, and phone providers to residential customers under the XFINITY brand, ond
also provides these services to businesses; this corporation practice penetration pricing
for example, regularly offers low introductory prices such as free or steeply discounted