Tag: Company

  • Do you Know Price Perception and Pricing Strategy?

    Do you Know Price Perception and Pricing Strategy?

    Do you Understand Meaning of Pricing Strategy and Price Perception

    A company will begins a good pricing with a complete understanding of the value and price of the products or services from the price setting to capture the customers’ perception on value and price. For example, if a customer decides to buy a product but he or she find that the price that set is higher the value which is from a products, this will make the customer making decision that does not buy this product. Definition of Price Perception.

    A company can make the decision on pricing based on two types of value basing pricing which are good-value pricing and value-added pricing. A good-value pricing means a company will sets a fair price by offering the right combination of quality and good service. Besides that, value-added pricing means a company will sets the prices based on customers’ perceptions of product value rather than the manufacture’s cost.

    The customers’ perception on value and price will set the ceiling of price; costs also will set the floor for the price that a company can set. A company needs to know the costs that spend on products before they can decide the pricing decision by using cost-based pricing. Cost-based pricing is a stage that a company set prices that including the producing expenses, distributing expenses. Selling expenses and the value of return on effort and risk. A company should consider the cost-based pricing as the important stage in pricing strategies. The costs that spend on products can be two forms which are fixed costs and variable costs.

    Fixed costs are the costs that do not easily vary with production level while variable costs are the costs that vary directly with the production level. Examples of fixed costs are bills for rent, interest or executive salaries while the examples of variable costs are bills of electricity, packaging expenses and so on. The company must calculate the costs of products carefully. Role of Price Perception in Consumer Buying Process.

    If the company costs are higher than other competitor’s costs during the producing and selling the products, this will make the company set the higher prices to earn some profits. The effects of charging the higher prices of products, the customers will buy the products from other competitors because the price that offers by the competitor is cheaper than the company. Therefore, a company should consider the customers’ perception on value and prices as important elements because customers can determine company performances.

    Consumers’ perceptions of products rely heavily on the pricing strategy that is chosen by the marketing manager. Price will impact not only consumer perception but also profit and speed of product adoption.

    Cheap or a Good Deal?

    It is Valentine’s Day, and you are waiting to unwrap a gift from your significant other. The box is opened to reveal a beautiful gold necklace, that you can’t wait to wear. A week later, you stumble upon the receipt for the necklace and find out it only cost $99. The beautiful gold necklace that you once loved now seems cheap and ugly. Why? The price has altered your perception of the necklace.

    Marketing managers must be careful of the pricing strategy they use to sell their products and services. Consumers’ perceptions of products, and services are drastically affected by different pricing strategies. For example, the staff of the local business called Heart Attack on a Plate Bakery is revamping their products’ prices. They are researching the best pricing strategy to implement for all of their baked goods. They want their prices to reflect a premium image but not be so costly that their consumers perceive their products as unaffordable.

    Pricing Strategy: Everyday Low Price

    One of the most popular pricing strategies in marketing is EDLP (everyday low price). The theory behind using this pricing strategy is that it provides value to the consumer by eliminating. The need to search for better deals elsewhere. It helps the retailer because it offers one price and avoids constant sales, discounts and price changes. Heart Attack on a Plate Bakery does not want to use an EDLP strategy as its products are premium. And area competitors can’t match its quality. Walmart is the leader in EDLP pricing. They stress that the overall price of consumer purchases will be less than the competition.

    Most stores that adopt this type of strategy also use odd pricing in order to further increase. Their consumers’ perception of a good pricing deal. For example, if Heart Attack on a Plate was going to use EDLP pricing. Then its cupcakes would be priced at $1.99 each. The thought is that consumers will ignore the 99 cents and view the cupcakes as costing only $1. Sometimes, the use of odd pricing can backfire and cause the consumer to perceive the product as cheap. For example, if a bride wanted to order a wedding cake from the bakery. And was quote a price of $99.99, there could be a negative price connotation or a lower-quality image.

    Pricing Strategy: High/Low Pricing

    Another pricing strategy that firms can use is called high/low. In this instance, the retailer depends on promotions and sales to temporarily reduce prices. This type of pricing strategy allows consumers to perceive that they’re getting a deal during a sale. It also allows another segment of consumers who are not price-sensitive to pay full price. Which in turn brings in more profits for the company.

    A high/low strategy also makes the consumer perceive excitement. Or that a deadline exists for getting the sale price during a limited-time period. A retailer does provide a reference point. Which is the price against which buyers compare the sales price of the product to the actual price.

    For example, Heart Attack on a Plate Bakery creates signs with the original sales price of its cakes. And then slashes through the price with the sales price revealed: ‘Cookies on sale for $7.99 a pound!’ vs. $9.99. The bakery is going to try to use this type of pricing to create excitement for its baked goods. In the past, it has criticized for higher prices. The staff hopes this new pricing strategy will bring in new customers.

    New Product Pricing Strategies

    There are two additional types of pricing strategies that companies can use to introduce new products. The bakery is introducing a new line of cheesecakes. It can implement a market penetration or price skimming strategy for the cheesecake line. A market penetration strategy is setting an introductory price low to build sales, market share and profits quickly. For example, the bakery could offer its cheesecakes for a low price of $9.99 to gain customer purchases immediately. As time passes, the bakery could increase the price in small increments, if needed, to secure more profits.

    The bakery could also use price skimming as the pricing strategy for its cheesecake line. This strategy appeals to customers who are willing to pay. A premium price for the chance to try the product first. The bakery could price the cheesecakes at $19.99, and describe the rich. Imported ingredients that are used to justify the higher price. In the end, the bakery has decided to pursue a market penetration strategy because it wants a large sales volume. The bakery will offer the cheesecakes at a low price of $9.99.

    Pricing strategies ultimately affect consumers’ perceptions of products and services. Marketing managers must take into consideration the type of product, profit and consumer perception that will fuel sales. High/low, EDLP, penetration or skimming all offer marketing managers a choice in how they price their product and produce sales. Heart Attack on a Plate Bakery has decided to pursue a high/low pricing strategy. They want to offer five different bakery products a week on sale to bring in customers. And get them to try a new product. In the end, pricing is the most flexible. Way to alter the 4Ps of the marketing mix (product, price, promotion and place). Pricing can and will adjusted throughout. The life cycle of any product in order to react to the environmental changes and consumer demands.

    Do you Know Price Perception and Pricing Strategy

  • Explain Dimensions of Price Perception

    Explain Dimensions of Price Perception

    How to Explain Dimensions of Price Perception?

    The price perception is directly related to the success of the company. Although in the end what customer pays is the reality but how it reaches at his decision is what is dependent on the perception. Definition of Price Perception, Because the company is successful in creating the desired perception of the product only then the customer will consider buying it. Hence, it is the price perception that precedes the buying decision of the customer.

    This is why price perception is among one of the most important factors while crafting the advertising strategies of the company. For a successful advertising strategy, it is very important to read the minds of the customers.

    The concept of price perception helps to understand those psychological factors which are in the minds of the customers and form which they make their purchasing decisions. Understanding the factors by which the seller can influence the perceptions is very important for the companies in order to attract and retain customers.

    This can help them to determine the pricing strategy that will ensure their competitiveness in the market and thus, superior financial returns. Role of Price Perception in Consumer Buying Process.

    The key dimensions of price perceptions are listed below:

    Price-Quality Relationship

    The impressive research done in pricing is about the consumer’s quality perception and their quality of products. Consumers perceive price as the prime indicator to presume the quality of the product. Many consumers believe that high priced products attribute better quality and lasts longer. Thus, price signals the quality. The point is very vastly mention in the marketing literature. If prices are mark lower than the level of consumers paying capacity they conclude it to be of low quality. Improvements in quality of products can trigger the mind for the first time and can convert the consumer into a loyal consumer as well. The consumer psychology is also affect and at the end will also affect the market share. The price-quality relationships have not found in the western societies.

    Price-Consciousness

    It is defined as consumers’ degree of focusing for paying less in buying. The high price conscious consumers tend to do a lot of research work before buying that particular product. The economic theories have also indicated that price has the significant roles in buyers’ preferences. The buyers generally try to maximize their benefits while purchasing and price plays a influential role in their buying process.

    Value-Consciousness

    This concept follows the price quality evaluation of the consumer. It comprises of what a consumer get on behalf of what they have paid for the products or services. If consumer thinks that quality is less then what they have paid, they tend to get dissatisfies and henceforth stops purchasing that product. The vice-versa of the situation leads to turning them into regular or may be loyal consumer. Consumers who are capable of making this sort of evaluations are call “Value Conscious Consumers” They generally don’t mind paying higher prices if the quality of product justifies it.

    Price Mavenism

    This could be define as the consumers being experts about the lowest price stores and starts sharing the information by informing them. These consumers evaluate different aspects of product to justify it with the price bracket into which they are offer and compare it with other stores to get the best benefits out of it. The consumer’s socio-economic character, previous experiences and learning processes play an important role. The price information collect is shape by rational and emotional motives of consumers. These types of consumers are experts in the product information’s and thus may be call as ‘advisors’ by other consumers.

    Sale Proneness

    Sales influence consumers’ price perceptions significantly. The consumers generally evaluate their last purchases with the current ones. Sales, price discounts aim to increase the total sales and also create positive purchases evaluation. The best price evaluations can made during the sales or discount prices. Another research has also indicate that young consumers tend to be lesser influence by the sales as compare to those of the older generations.

    Prestige Sensitivity

    It is a psychological dimension. Consumers can perceive high price as positive and even as a negative. The high pricing of the product can be perceive as a way of losing the money. Consumers buying these sorts of products generally consider it as a part of their status. They tend to purchase on their emotional moves. A prestigious product is consider to be a symbol of wealth and living above standards. Prestige sensitivity is the factor behind the same and can happen because of difference of socio-economic characteristics of consumers. This concept can be use in developing high quality and distinct product image.

    Domestic-Foreign Product Sensitivity

    The product sensitivity amongst domestic-foreign product also plays an important role in price perceptions. The place of product manufacturing also influences the the buying behavior and hence leading to think upon the pricing being perceive by consumers as well. Thus this dimension is also necessary to be include into the consumers’ experience of judging the price. Brand recognition, effects the quality and price perceptions. Origin of country is also not untouchable by it and influences the consumer. The products from develop country are generally regrade as the high quality and costly. The domestic and foreign products are also view emotionally and symbolically. This dimension is unique to evaluate and hence included in describing price perceptions.

    How to Explain Dimensions of Price Perception

  • How Do You Know Your Company Wants Help From The Outside?

    How Do You Know Your Company Wants Help From The Outside?

    How Do You Know Your Company Wants Help From The Outside?

    When Your Company Should Seek Help From The Outside! There’s no reason you should do it all. Everyone needs help once in a while. Days are jam packed with meetings and checking off to-do lists. That leaves little time to nurture your business and employees. There’s no shame in working with a person on the outside to help you grow your business. Be The Change You Want to See in The World.

    Do yourself a favor and stop doing it all alone. Work in teams and build partnerships outside your company to stay ahead of the curve. Don’t sell yourself short just because your schedule is busy. Find ways to work around it and still succeed. See times when your company should seek help from the outside.

    Marketing

    Marketing is a large undertaking. There are various forms of marketing that exist and need to be addressed. This takes a lot of resources and knowledge to do it right. Digital marketing is involved and to complete it right you have to know what you’re doing. Advertising online and on social media is complicated and takes careful planning and execution. Don’t be afraid to search for outside agencies to help you achieve your goals. They’re the experts, and it’ll be helpful to have an agency take some work off of your employee’s plates. New Roles of Human Resource Management in Business Development.

    Definition: Marketing is defined by the American Marketing Association as “the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.”

    Technology

    You don’t have to try and learn about technology if it doesn’t interest you. Educate yourself, but leave the rest up to the professionals who know what they’re doing. There’ll be times your computer crashes, or you need them for e-forensics to collect and analyze data. There’s a continuous list of reasons why it’s good to have IT experts on your side. You don’t want to risk losing data or files and having to start all over again on your assignments. You don’t have to know it all, but you do have to know when it’s time to call and get help. 

    Technology is the collection of techniques, skills, methods, and processes used in the production of goods or services or in the accomplishment of objectives, such as scientific investigation.

    Motivation

    There are times when business is slow, and your team is feeling down. This is exactly when you need to bring back the energy to your group. Hire a motivational speaker or host a fun activity in the office. Do Good Always! If spirits are low, it’s leadership’s job to get the team feeling good again and inspired to do their work. Throw some excitement their way and let them know you’re willing to do whatever it takes to make them feel happy to be at the office.

    “Motivation is the reason for people’s actions, desires, and needs. Motivation is also one’s direction to behavior, or what causes a person to want to repeat a behavior. A motive is what prompts the person to act in a certain way, or at least develop an inclination for specific behavior.”

    Consulting

    There are times a business falls into a rut and can’t crawl their way out. This is when you should check into hiring an outside consultant to help you brainstorm and innovate. They know how to work with businesses and bring them up to a higher level of functioning. They’ll work with you and pick your brain to create better ways of doing business and working with your customers. If nothing else, use them to bounce ideas off of each other and reinvent yourself.

    “Management consulting is the practice of helping organizations to improve their performance, operating primarily through the analysis of existing organizational problems and the development of plans for improvement.”

    Conclusion

    A business can’t always do it all themselves. Be Your Extraordinary Self! It’s smart to build new relationships and not put the weight of the company on your shoulders. These are those times when your company will need help from the outside world.

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