The first rule of marketing pricing is that it’s all about the price. Pricing strategies should be aligned with a firm’s overall goals and objectives.
Marketers, customers and investment agents cannot afford to shop around too much. If they do, they may miss out on great opportunities. On the other hand, if a prospect or client cannot find what he needs quickly or economically, he may not be sufficiently motivated to stay with the company or purchase its products and services. Marketers and companies therefore work toward developing a wide-ranging and comprehensive marketing program that encompasses each individual and company’s specific marketing needs. When this strategy is combined with accurate assessment of competing offers and promotional activities, a company’s marketing pricing strategy can become very effective.
Once the target audience has been identified, marketers then begin to evaluate their marketing prices.
There are two schools of thought on this question. One school believes that there is only one single price in marketing and that it should remain consistent throughout a company’s marketing mix. The second school of thought holds that competitors’ marketing prices serve as a sort of marketing ammunition against which a company can base its overall marketing strategy. This strategy can thus increase the competitive advantage of a company as well as reduce costs.
In addition to the marketing price, however, marketers and company executives also consider other factors such as the product’s value to the prospective buyer.
They may prefer to price a product below its actual worth. They may also prefer to price a product above its tangible worth, so that the customer will be sufficiently impressed by the product to make a purchase decision. There are also marketing managers who believe that if a customer feels good about the product, he is more apt to buy it. These managers may use these principles to “trick” potential buyers into feeling less apprehensive about a product that has just come onto the market.
To some degree, this approach works. Potential clients and competitors may not realize that another firm offers a lower price. They may, however, recognize that a competitor is offering it for less. With this in mind, a marketing manager may offer an item that is below its real worth in hopes that the customer will purchase it from him instead. This practice, called “dirty marketing,” may be illegal in some cases.
The practice of “dirty marketing,” however, may not necessarily be considered unethical by today’s legal standards.
In some circumstances, it can be a means to achieve a desirable result. For example, a company’s marketing managers may use trickery to attract more customers to a company’s website. They may promise free reports, free ebooks, or other products that seem too good to be true. When a customer takes advantage of these products, the marketing manager can then jack up the price, thus increasing his profits. In some other cases, however, it may simply be a company’s attempt to remain competitive.
As the internet continues to become more dominant in a company’s daily operations, it is becoming increasingly difficult for a company to successfully survive without using it to its advantage.
By offering a service or product at a lower price than competitors, a marketing manager can increase a company’s overall profits. In addition, marketing can serve to reduce the company’s competition by ensuring that prices are set at a level that will not drive customers away. Thus, a company that is able to use marketing wisely can ensure that it has a bright future due to its ability to keep prices low while attracting new customers on a regular basis.
Unfortunately, this strategy can backfire, causing the company to lose money in the process. This is why marketing managers must be extremely careful when setting their prices. They must determine what they can reasonably charge for certain items, while still providing a quality service or product to their customers at a reduced cost. If they are unable to do so, they may find themselves facing a lawsuit from a competitor who feels that they were duped into paying the higher price. For this reason, it is essential that marketing managers take great care when choosing how much to charge for certain products and services.
When marketing managers seek out new ways to compete with other companies, they should think about how their price points could entice new customers and retain existing ones.
They must also consider the way they will target their marketing efforts in order to increase profits. The bottom line is that marketing managers must be vigilant when searching for new ways to differentiate themselves from their competitors. The more effective a company is at marketing itself, the more customers it will have, and the more money it will make.