The conference has come to an end. Your complete Strategic Marketing Plan is now due. Revise your current draft by applying the critiques from the Group Project in Unit 4, and add the following components to create your final plan:
*Pricing (from the Unit 4 Discussion Board)
*Channels of Distribution
*Customer Relationship Management
Based on our other marketing mix elements, we will consider various pricing objectives such as revenue maximization, quality leadership, maximizing unit profit margin, etc. These pricing objectives have been selected for consideration on the fact that our company is fairly new entity operating in the luxury products segment aimed at very high end customers or upper segment of the society who can afford to pay premium prices for quality goods but are very small in number.
The choice of our ultimate pricing objective will revolve around several issues. Since we are a relatively new company as compared to other established players in the industry, we need to be competitive as compared to other offerings in the market, even though the other offerings are not same as ours in terms of quality and design. This is important in order to penetrate among our target customers. A very high price with exhobirant profit margins will deter the customers from trying out products. At the same time, We also need to sustain our revenues and profitability in the initial period to survive because we are targeting only high end customers and a very niche segment and we do not expect to sell many units of our products like mass market players. Therefore, we have to chose a pricing strategy that not only let us earn reasonable profit margins but also establish our presence as a quality supplier in the high end market.
Based on these considerations, we will chose quality leadership as our pricing objectives and will charge a premium but competitive pricing to position our products as of the highest quality and most differentiated one in the industry. Our premium pricing will also stamp our presence as a quality supplier of innovative handicrafts not available elsewhere with other players in the market. Too much undercutting of prices will lead people to believe that our products are not of the highest quality. Therefore, an above average but reasonable profit margin will be suitable in the initial stages. Further, this will also help us in securing higher profit margins as well. Since we do not expect to sell large number of units and will be dependent on very high end customers who can afford to pay such premium pricing and derive satisfaction of owning such high quality differentiated products, the quality leadership with premium pricing is a suitable pricing strategy for our company. One the customers start appreciating the "value proposition" in our products in terms of its exclusivity and quality, we can escalate our profit margins at that point of time.
Product policy in marketing mix is concerned with important decisions regarding the following aspects of the product or services of the ...
Based on our other marketing mix elements, we will consider various pricing objectives such as revenue maximization, quality leadership, maximizing unit profit margin, etc.