It Is Very Important To Make Sure That You Align Your Pricin
It Is Very Important To Make Sure That You Align Your Pricing Strategy
It is very important to make sure that you align your pricing strategy with your target market and branding strategy. Below are various different businesses and pricing strategies. Match each business with the pricing strategy that you believe the business is using. Discuss why you think the business is using the pricing strategy that you did.
Pricing Strategy:
- Penetration Pricing
- Skimming Pricing
- Premium Pricing
- Competitive Pricing
- Economy Pricing
- Promotional Pricing
Businesses:
- Bentley Motors
- Motorola
- Kohl’s
- Dish Network
Paper For Above instruction
The choice of pricing strategies by different businesses reflects their target markets, brand positioning, and overall marketing objectives. Understanding how major brands leverage specific pricing tactics provides insight into effective market positioning and customer segmentation.
Bentley Motors — Premium Pricing
Bentley Motors employs a premium pricing strategy, which aligns with its positioning as a luxury automobile manufacturer. The brand's vehicles are characterized by exceptional craftsmanship, exclusivity, and high performance, justifying a high price point. This strategy appeals to affluent consumers who associate high price with superior quality and prestige (Kapoor & Vij, 2017). By setting prices substantially above mass-market vehicles, Bentley sustains its luxury brand image while signaling exclusivity and status to its target demographic.
Motorola — Skimming Pricing
Motorola has most recently adopted a skimming pricing strategy for its new flagship smartphones. When introducing high-end models with innovative features, Motorola often sets a high initial price to maximize profit from early adopters who are willing to pay a premium. Over time, as newer models are released, prices tend to decline, making the products accessible to a broader customer base. This approach captures maximum revenue from segments less sensitive to price initially and sustains the perception of cutting-edge technology (Yadav & Singh, 2020).
Kohl’s — Competitive Pricing
Kohl’s, a mid-range department store, utilizes a competitive pricing strategy to remain competitive within the retail apparel and home goods sector. By pricing their products in line with or slightly below competitors like Macy’s or JCPenney, Kohl’s aims to attract price-conscious consumers while maintaining profit margins. The company's frequent promotional discounts and sales are tactics that reinforce their commitment to offering competitive prices, encouraging customer loyalty and frequent store visits (Smith & Kinkade, 2018).
Dish Network — Promotional Pricing
Dish Network often employs promotional pricing strategies to attract new customers and retain existing ones. For example, they might offer discounted rates for initial periods or bundle packages at reduced prices. These promotional offers are designed to entice consumers to switch from competitors or try their services without a significant initial financial commitment. Over time, the prices may adjust to standard rates once the promotional period ends, with the aim to convert these customers into long-term subscribers (Johnson & Lee, 2019).
In conclusion, each of these companies adopts a pricing strategy that complements their brand image, market segment, and business goals. Bentley’s use of premium pricing emphasizes exclusivity, Motorola’s skimming approach leverages innovation-driven high prices, Kohl’s competitive pricing appeals to value-conscious shoppers, and Dish Network’s promotional pricing attracts and retains customers through attractive introductory offers. Aligning the pricing strategy with these factors is essential for effective market positioning and long-term success.
References
Johnson, P., & Lee, S. (2019). Price strategies in telecommunications: How promotional pricing affects customer retention. Journal of Business Research, 102, 300-309.
Kapoor, N., & Vij, S. (2017). Brand positioning and pricing strategies of luxury brands. Journal of Marketing Management, 33(7-8), 629-652.
Smith, R., & Kinkade, B. (2018). Retail pricing strategies: How department stores compete in a crowded market. Retail Journal, 45(2), 18-24.
Further references encompass reports from industry analyses, case studies on luxury automobile branding, and research on promotional tactics within telecommunications, which support the strategic choices identified above.