The Importance Of Marketing Strategy
Another important factor to consider are my competitors, gathering information about their prices, services, position in the market and the customers they attract makes it easy to compare and identify a suitable price for the products. Lastly the profit I intend to make determines the price charged for my products ( Jensen, 2013).
The pricing strategy I consider most suitable is penetration pricing where prices are set low to gain market share and attract more customers once this is achieved prices are again raised. This strategy increases the rate of market recognition and prevents new competitors from entering the market in case of inadequate study of the trend. My rationale for this pricing strategy is that larger market share is gained rapidly later price is increased to ensure long term profitability (Smith, et al …show more content…
In premium pricing higher prices are set for the products to attract buyers whose perceptions are based on price. This practice tends to assume that expensive prices means high quality, more desirable or reliable. Considering the market, in this situation, colleges, high school and large business where the vending machine serves fruits and restaurant quality salad the competitors strategy of pricing is not applicable as the highest percentage of this market group consist of dependent population who does not have income to purchase high cost products the large business might also consist of large amount of low income earners where high price is not a priority (Mills, et al 2002)
In conclusion, identifying effective pricing strategy is vital where profit maximization is the main organization’s objective. There are also other pricing strategies like variable pricing strategies, psychological pricing, value based pricing and price discrimination among others which can be used when identifying a price for a product depending on the organization’s goals and objective(Smith, et al