Pickle Lip Balm
---- Pricing Plan
Pricing Strategy
Status quo pricing
I choose Status quo pricing strategy, which means that a product should charge a price identical to or very close to the competition’s price. Since there are many different kinds of lip balm in the market, the pickle lip balm still belongs to lip care category so that it is important to consider competitor’s price.
Penetration pricing
Then penetration pricing strategy can also be a choice, which a firm charges relatively low price for a product when it is first rolled out as a way to reach the mass market. The pickle balm includes mineral oil and beeswax, which are not very expensive ingredients. Moreover, the idea comes from old tradition so that the product …show more content…
As a new product, it needs this strategy to catch customer’s eyes. I will reduce left digit number as small as possible and increase the right digit number instead.
Step 2: Influence Their Perception
Strategy: Prime a Small Magnitude
Tactic 10: Use “Congruent” Language
This is a strategy that tries to attract customer through the price tag design. As a new flavored lip balm, it is important to emphasize its low price as well. I will add “low price” sign under the price.
Step 3: Motivate Them to Buy
Strategy: Use Discounts Strategically
Tactic 26: Provide a Reason for the Discount
This strategy shows a reason for selling in discount. As a new product in the market, it is really reasonable to sell in discount at first and this information on the tag encourages customers to try it as soon as possible. Therefore, I will add “new limited” sign on the tag.
Step 4: Maximize Your Revenue
Strategy: Make Price Increases Undetectable
Tactic 28: Use More Frequent Price …show more content…
If you know that you will need to increase your price in the future, you would better do it steps by steps. In this way, customers are easier to accept it and a company can increase its revenues at the same time. For pickle balm, I will increase the price from $ 4.49 to $ 5.69, then from $ 5.69 to $ 6.99 in the next few years.
Cadillac Cimarron
Before1982, Cadillac had always focused on making massive cars, but it changed in 1982 when Cadillac Cimarron came out which disappointed customers. Due to the energy crisis, the Energy Policy and Conservation Act was passed, which encouraged to produce small and fuel efficient vehicles. In the situation, Cadillac had no choice but introduced the Cimarron, which had worse evaluation but sell at a double price compared with J-body siblings.
I think that if a luxury brand had to introduce some products that were not luxury anymore, the company should inform customers in advance and tell customers its motivation. At the same time, a new product should reduce its price in order to distinguish with other luxury products.
Work Cited
1. Pickle Lip
---- Pricing Plan
Pricing Strategy
Status quo pricing
I choose Status quo pricing strategy, which means that a product should charge a price identical to or very close to the competition’s price. Since there are many different kinds of lip balm in the market, the pickle lip balm still belongs to lip care category so that it is important to consider competitor’s price.
Penetration pricing
Then penetration pricing strategy can also be a choice, which a firm charges relatively low price for a product when it is first rolled out as a way to reach the mass market. The pickle balm includes mineral oil and beeswax, which are not very expensive ingredients. Moreover, the idea comes from old tradition so that the product …show more content…
As a new product, it needs this strategy to catch customer’s eyes. I will reduce left digit number as small as possible and increase the right digit number instead.
Step 2: Influence Their Perception
Strategy: Prime a Small Magnitude
Tactic 10: Use “Congruent” Language
This is a strategy that tries to attract customer through the price tag design. As a new flavored lip balm, it is important to emphasize its low price as well. I will add “low price” sign under the price.
Step 3: Motivate Them to Buy
Strategy: Use Discounts Strategically
Tactic 26: Provide a Reason for the Discount
This strategy shows a reason for selling in discount. As a new product in the market, it is really reasonable to sell in discount at first and this information on the tag encourages customers to try it as soon as possible. Therefore, I will add “new limited” sign on the tag.
Step 4: Maximize Your Revenue
Strategy: Make Price Increases Undetectable
Tactic 28: Use More Frequent Price …show more content…
If you know that you will need to increase your price in the future, you would better do it steps by steps. In this way, customers are easier to accept it and a company can increase its revenues at the same time. For pickle balm, I will increase the price from $ 4.49 to $ 5.69, then from $ 5.69 to $ 6.99 in the next few years.
Cadillac Cimarron
Before1982, Cadillac had always focused on making massive cars, but it changed in 1982 when Cadillac Cimarron came out which disappointed customers. Due to the energy crisis, the Energy Policy and Conservation Act was passed, which encouraged to produce small and fuel efficient vehicles. In the situation, Cadillac had no choice but introduced the Cimarron, which had worse evaluation but sell at a double price compared with J-body siblings.
I think that if a luxury brand had to introduce some products that were not luxury anymore, the company should inform customers in advance and tell customers its motivation. At the same time, a new product should reduce its price in order to distinguish with other luxury products.
Work Cited
1. Pickle Lip