Question

Marketing Programs to Build Brand Equity

Choose a product category. (The two brands have to be from the same category) Profile two to three brands in the category in terms of pricing strategies and perceived value. If possible, review the brands' pricing histories. Have these brands set and adjusted prices properly? What would you do differently?

Answer 1

Pricing strategies is deciding how much money you want (or need) to make. It is obvious that, you need to set a price that covers your costs to make the product available to consumers, but you also need to understand the types of pricing strategies so we can develop a comprehensive, long-term pricing strategy.

Some of the Pricing stragtegies:

• Variable Pricing:The price is a moving and fluctuates based on changing environmental, economic, market, competitive, and consumer factors. Constantly changing airfares provide the perfect example. Variable pricing is why websites like Travelocity are so popular and successful.
• Prestige Pricing: A brand and products under that brand umbrella are priced higher than other brands in the market. Prestige pricing creates the consumer perception that each product with that brand name is a luxury item, high quality, or prestigious in an emotional way, making it worth a higher price. This is a long-term pricing strategy rather than a tactic to boost short-term sales.
• Segment Pricing: Products have one price tag for one audience segment and different price tags for other segments. This only works when audience segments have no chance of learning what other people pay for the same product and is often used in geographic pricing strategies.
• Bundled Pricing: Products are grouped together and sold for a single, bundled price in an effort to persuade consumers to buy more but still feel like they’re getting a better value than if they purchased those products (or similar products) separately.

• Odd-Even Pricing: When products are priced at $9.99 instead of $10.00, odd-even pricing is at work. Psychologically, consumers perceive the odd price tag to be a lot cheaper and a much better value than the even price tag.
• Quantity Pricing: Quantity discounts encouraging consumers to buy more than they intended because they perceive the discounted price as increasing the value that the purchase provides to them.

3 Cs of Pricing:

• Setting prices for your brand depends on three factors: your cost to offer the product to consumers, competitors’ products and pricing,
• Cost: understanding of all costs related to producing of the product, including development, creative, production, distribution, storage, advertising, manpower, and so on.
• Competitors: Accurate analysis of your competitors’ products, brand, and prices as well as where your brand is positioned relative to those competitors.
• Consumers: In depth research providing insight into consumers’ wants and needs as well as their perceptions of the value of your brand and products and your competitors’ brands and products.

Two international brands to check this is mobile brands Apple and Samsung. If we check these brands both are best in their own ways, but a bit of difference in the pricing and marketing strategy have made to get their own market share.

Apple I phone cost always on higher side here it is prestige pricing for them and their target market too and it has seen success in US and some other countries.

But Samsung on the other hand followed their own strategies to build their brand by providing both low cost and high end mobiles in the market with various features in mobiles.

Understanding of the demographics of the place is very important while building any brand for their product which I think Samsung did very well in its capturing the market, for eg: specially Indian market apart from US because in Indian market people look at more features mobile with good quality and at a reasonable price, which I think Samsung did its best and captured the market and now I phone has been changing its strategy with understanding the 3C’s of pricing to get a hold on Indian market.