Suggested Marketing Mix for Proctor and Gamble
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What pricing and marketing (target market, product, place, and promotion) strategies should Proctor and Gamble follow?
To gain market share, Proctor and Gamble is lowering its prices. There are also a lot of conflicting signals as to whether or not consumers are willing to accept price levels that were in place prior to the current recession. What will the prices of P&G's products be in 6 months? Based on its current prices, 110% tells your reader that its prices will be 10% higher than its current prices and 90% tells your reader that its prices will be 10% lower than its corrent prices.
P&G is also selling its products in its own stores AND selling its products to distributors and to retailers with whom P&G's stores compete.
Explain the pricing strategies that firms use.
Explain what factors are involved in the development of a pricing strategy.
Explain the relationship between costs and prices.
Explain the relationship between a firm's pricing strategy and its product, distribution, and promotion strategies
Comment on P&G's target market(s) and how its products are differentiated from competitive products, whether it should be distributed more or less intensely than competitive products, and whether it should be promoted more or less intensely than competitvie products.
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Solution Summary
The analysis addresses a suggested marketing mix strategy for Proctor and Gamble. It includes the price, promotion, product and place considerations involved in the development of the marketing strategy, along with justification for decisions or suggestion made in each area.
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Explain the pricing strategies that firms use
The pricing strategy used depends on the firm's position in the specific industry and the level of market saturation, or competition, of the products or services the firm offers. A firm can use a low cost leader strategy, if costs allow and pricing is not too far below competitors. This is similar to penetration pricing, where the firm attempt s to sell larger quantities of product at a low price. Quality leadership is a pricing strategy of pricing goods or services higher, to try to establish the product as high quality (Net MBA, 2010). Skim pricing is also used for customers who are less affected by price, for products that are less elastic in price.
Explain what factors are involved in the development of a pricing strategy
Factors involved in pricing strategy include market penetration, costs (fixed and variable), any added value the product provides and demand elasticity. If the market is fairly open, meaning there are few competitors, a firm may decide to lower price slightly below that of others, to increase market share. Fixed costs typically include costs of production and wages, while variable costs can include supply chain activities, marketing programs (often subject to change) and any other variable that is subject to change. Products must be prices at a level that the firm makes a profit. A ...
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