Price skimming, also known as market skimming, is a product pricing strategy where then firm charges a high initial price when introducing a product. With time, as the demand of customers is satisfied, the firm lowers its price a bit attracting those who are more price sensitive. This strategy is useful when there are enough customers who are willing to buy the product at a high price, when the high price keeps competitors from entering the market, lowering the price won’t have a huge impact on sales volume and usually products that are highly priced are viewed of high quality.
Obviously, Ferrero Rocher follows the market skimming strategy. Ferrero Rocher is a premium product and henceforth is estimated higher than standard chocolates. There …show more content…
There are five product mix pricing situations: product line pricing, optional-product pricing, captive-product pricing, by-product pricing and product bundle pricing. As you can see in table 1, Ferrero Rocher offers a variety of designs for Christmas with varying prices. Ferrero Rocher targets specific people in the market and is known for its medium to high prices. Ferrero can be found in supermarkets, malls and shops. As a product mix pricing strategy, Ferrero Rocher uses the product line pricing, which means setting prices across an entire product line. Since the raw materials that are used in manufacturing Ferrero chocolate have high costs, the company’s aim is to ensure more than one supplier for their raw materials and to improve their quality more. Ferrero used to have wholesalers who distributed or delivered its products in the market but with time they started selling directly to customers and stopped selling through wholesalers. It worked on its delivery trucks and increased its cost by posting the Ferrero logo on its …show more content…
Sales promotion is a very important part of a company’s growth. The company does introduce promotions during occasions, as you can see in table 1, Ferrero Rocher has multiple Christmas offers this year. However, the company should make bigger campaigns especially in the holiday seasons to maintain its position in this fierce market. Another new way Ferrero Rocher can promote is products is by offering price discounts. The company is known to have a standardized pricing level that doesn’t’ offer price discounts, so introducing it would be a good idea since money-off promotions are very attractive customers. Consumers tend to change their mind and switch from one brand to another just because of the price, in order to save money. However, this strategy can be easily copied and predicted, so Ferrero Rocher should not focus and rely on this strategy only. Another idea they can introduce at this time of the year, is to offer any customer who buys two Ferrero Rocher packs a small Christmas tree, as shown in figure 8. Another idea of sales promotions could include a competition of the best table decoration on Christmas Eve using Ferrero Rocher chocolate. The winner for example would win a trip for to two to
Obviously, Ferrero Rocher follows the market skimming strategy. Ferrero Rocher is a premium product and henceforth is estimated higher than standard chocolates. There …show more content…
There are five product mix pricing situations: product line pricing, optional-product pricing, captive-product pricing, by-product pricing and product bundle pricing. As you can see in table 1, Ferrero Rocher offers a variety of designs for Christmas with varying prices. Ferrero Rocher targets specific people in the market and is known for its medium to high prices. Ferrero can be found in supermarkets, malls and shops. As a product mix pricing strategy, Ferrero Rocher uses the product line pricing, which means setting prices across an entire product line. Since the raw materials that are used in manufacturing Ferrero chocolate have high costs, the company’s aim is to ensure more than one supplier for their raw materials and to improve their quality more. Ferrero used to have wholesalers who distributed or delivered its products in the market but with time they started selling directly to customers and stopped selling through wholesalers. It worked on its delivery trucks and increased its cost by posting the Ferrero logo on its …show more content…
Sales promotion is a very important part of a company’s growth. The company does introduce promotions during occasions, as you can see in table 1, Ferrero Rocher has multiple Christmas offers this year. However, the company should make bigger campaigns especially in the holiday seasons to maintain its position in this fierce market. Another new way Ferrero Rocher can promote is products is by offering price discounts. The company is known to have a standardized pricing level that doesn’t’ offer price discounts, so introducing it would be a good idea since money-off promotions are very attractive customers. Consumers tend to change their mind and switch from one brand to another just because of the price, in order to save money. However, this strategy can be easily copied and predicted, so Ferrero Rocher should not focus and rely on this strategy only. Another idea they can introduce at this time of the year, is to offer any customer who buys two Ferrero Rocher packs a small Christmas tree, as shown in figure 8. Another idea of sales promotions could include a competition of the best table decoration on Christmas Eve using Ferrero Rocher chocolate. The winner for example would win a trip for to two to