Price Strategy Reflecting Organisations Objectives And Conditions Marketing Essay

Published Date: 23 Mar 2015

This report will contain information on the strategies used in setting out the price of the products or services that reflect an organisation's objectives and market conditions. How promotional activity is integrated in achieving marketing objectives and the impact of additional elements of the extended marketing mix for the particular company. Also the report will explore more on the extended marketing mix to different contexts and the difference between international marketing and domestic marketing.

PRICE STRATEGY REFLECTING ORGANISATION'S OBJECTIVES AND MARKET CONDITIONS

INTRODUCTION

Price is charge of something put in place for a product or services [1] . Principles of Marketing 5th European pg 639. Pricing is of importance and the most difficult part in the element of the marketing mix. If the price is set out correctly in the market leads to good returns which is profit and organisations can sustain their position in the market, though pricing strategy can change it go through its life cycle. [2] When prices are set out too high or too low could result to the company to stay in the market or driven. Price battle, forces companies to put more effort in order to achieve the sales volumes necessary to break even. There are different strategies that can be used in setting out the price of the products or services as follows.

PENETRATION PRICING

This is the process of setting price of products or services in a low price in order to defeat the competition by gaining market share, expanding the market also can be used by new companies to enter the market. Companies such as Pound land, Iceland, Primark etc put in place this type of strategy they have a management which is committed to expand its market. Woolworth set its products to low prices as there price strategy resulted to their downfall in the market. The impact of this pricing strategy is that normally revenues are less due to price been low and they can't increase their prices due to the nature of the company itself when it entered the market with low price.

SKIMMING PRICING

The price strategy which aim to target the market by selling their products or services at higher prices example Jaguar cars, Gucci, Versace etc this strategy is normally been adopted by the companies who produce their own products and use it when introducing new product in the market in order to make returns before competition become tense. Sony company uses this strategy regularly to their products such as HDTV which was sold in high price of $43,000 for 40-inch HDTV in Japan in 1990 few people manage to afford, they later decided to reduce their prices in order to get new customers. The market condition for this skimming is that the products should be of good quality that could link with the price.

SATISFACTORY RATE OF RETURN

Small family business or retired consultants are the ones who use this kind of strategy in pricing their products or services to their business for the purpose of earning nominal rates. They want to get good return out of it with no interest of going beyond that amount gained using cost-cut policy.

DIFFERENTIAL PRICING

Companies sometimes tend to have differential strategy were they tend to have different price of products or service in the market, they have put in place demand-oriented policy were demand trend is evaluated effectively basing on the way they have segmented their market that should be different to other markets for targeting certain customers. Example of this can be found in the international markets were prices are not the same in the market that organisations need to take into account the economic condition, rules and regulations, competitive condition etc. Examples of the companies are Renault, Samsung, and Philips etc. The Organisation objective is gain high market share in developed countries or may aim at getting more customers in developing area.

INTERGRATION OF PROMOTIONAL ACTIVITY TO ACHIEVE MARKETING OBJECTIVES

In order to make promotional activity to be successful marketing objectives must be taken into consideration. Marketing objectives are the strategic plans put in place by the organisation and they should be systematic, measurable, achievable, realistic and time-bound (SMART). McKay (1972) suggested that marketing objectives is all about extending the market, increasing the volume of market share and improving profitability. Ansoff (1968) argues that marketing objectives is about finding the right product and market either new products or already existing in the market. Gultinan and Paul (1988) saying identifying marketing objectives certain factors should be considered such as increasing marketing share, maximising cash flow, positioning the company at the right place.

Promotional activity (mix) can also be referred as marketing communications mix which composed of different activities involved in it such as advertising, sales promotion, public relations and personal selling.

ADVERTISING

This is the process of paying something for time spent and space occupied to the media but advertising organisation does not own it. Examples of advertising are internet, print, radio etc. The marketing department including operational manager are responsible to make sure they are producing a product of good image and quality that attract customers. Advertising should be planned properly for the purpose of targeting certain market, a company may be losing customers may be due to the image of the product once they change the advert to certain extend it could attract more new customers Example of the company is Guinness.

PUBLIC RELATIONS

Is the way of creating a good relationship with the company's various publics and stakeholder of an organisation, this is by having good corporate image, handling or avoiding rumours, stories and events. Examples of public relations are press releases, sponsorship, special events etc. An image of the company is the one that attract the public, whether it might be good or bad they need to represent themselves to the public in a certain way that the public could believe in them. Company's decisional planning for the highest level need to take into consideration which method they can apply to gain publicity. [3] 

SALES PROMOTION

Its different activities involve of doing aggressive sales to capture more customers as possible in which can be done through media, free gifts, providing vouches, direct selling etc. This process can sometimes create problems to the company by creating an image to the customer of having promotions regularly customers may decide to join their competitors, due getting bored of same activity. Sales promotion should be done on daily basis it should be planned for specific time depending on the season too this is referred to cloth retail shops.

PERSONAL SELLING

A one to one sale of item or service to the customer for the purpose of making profit. A person can be a shop assistant, or executives. Selling small or big items, taking orders, dealing with the till, collecting payment which could be inform of cash or by bank card.

IMPACT OF ADDITIONAL ELEMENTS OF THE EXTENDED MARKETING MIX FOR THE UNILEVER PLC

Unilever is one of the world's leading suppliers of consumer goods having mix of products such as food, home care, and personal care with the mission of continuing making products of good brands and quality that touches lives of people over 2billions [4] . Products in Unilever plays the role in the extended marketing mix that influence marketing strategy of the products [5] . Kotler and G. Armstrong defined marketing mix as a controlled combination, where by different methods are being used to meet customers' needs and wants. The extended marketing mix is people, processes and physical evidence.

PEOPLE

In marketing people are trained and motivated in the organisation on how to market the products or services this is in terms of good customer services and attitude towards the customer, as the marketing environment is highly competitive staff have to create a good image to the customers absence to that the company may lose it's customers.

PROCESSES

There are certain techniques marketers use to satisfy customer needs, organisations have different styles of meeting the customer needs example they can create the policy of returning goods, club cards, making queries etc, this creates a good relationship with customers when they feel that their needs have been met.

PHYSICAL EVIDENCE

These are the things that customer can sees and attracts them to acquire such items from the shop, this could be the image of the products, shop outlet, customer service, music played in the shop, staff appearances etc.