Whatever the reasons may be, it is time that a professional integrated procedure be taken towards pricing coverage and strategy. Basically, pricing decisions shouldn't be left to fund personnel exclusively. Marketing personnel should be positively involved in the process as well.
Sri Lankans are extremely price sensitive, in most purchases. The reason why are obvious, considering the fact that the country is very much in need of development. The main facet in Sri Lanka, is the investment required in purchasing products and services. In other words, just how many rupees need to be tendered. As from the investment required, Sri Lankans in most cases do not compare the product quantity purchased. (Former mate. litres, grammage). That is an important aspect for Sri Lankan marketers to notice. Always consider the purchase price point, from an investment point of view, not from a size/content perspective by themselves. Try and marry both of these aspects, as tightly as is feasible.
Another aspect is that Sri Lankans, are really "value conscious". (Affordability). They demand increased value, for each and every rupee spent! As a result, providing value through astute rates, is a major ingredient for success. Needless to say in inflationary surroundings, it isn't an easy job. A careful balance between the value proposition and investment, needs to be met.
Pricing strategies in Sri Lanka, are centered mainly on cost/mark-up things to consider. You can find inward factors, nor reflect the realities of industry. As such, the necessity in Sri Lanka, is for market focused charges strategies, given the competitive intensities prevailing in the global environment.
Why is it important to "integrate" prices decisions, as well as other elements of the marketing mix?
Pricing decisions cannot be taken in isolation. They have to be included with the other components of the marketing combine. Not to accomplish that, could lead to inadequate marketing and a wastage of resources.
Take for example, a brandname such as "Rolex". Rolex is world renowned as a classical masterpiece of your time and not merely a watch. Pricing strategies used for Rolex, should be in keeping with the "positioning" of the brand and the image of luxury and position. Circulation activities for Rolex, should be essentially "exclusive".
Pricing coverage should communicate this exclusivity as well. (High quality costed, hard to get, if you don't possess the will to obtain it).
How many times have we observed, non-integrated charges strategies being implemented in the Sri Lankan market place. Prices are increased, without anticipated concern, to the other components of the marketing mixture. The results could be extreme. For instance, if prices are increased of a certain product and quality criteria are not maintained for same.
Therefore, all charges decisions should be evaluated alongside the other components of the marketing mix. This is where marketers should come in and offer their inputs. To leave it to fund personnel, is merely not acceptable. Money personnel can't be expected to have the same outlook to pricing, as those in marketing.
The contribution that prices can make, towards sales promotions.
The value of rates, as a promotional tool, is not quite known and exploited. However, scheduled care must be taken not to overexpose this aspect, since it could then be counter productive.
Price based promotions can be quite effective in providing a short term raise to flagging sales quantities. Discounts, reward offers, give-aways, special repayment terms etc. will be the popular methods useful to perform sales promotions, which can be price founded. Too repeated price based campaigns, can be counter effective. The probabilities are that consumers will establish negative perceptions about brands, which are regularly promoted through price. Marketers and non-marketers would do well to understand this aspect.
What are the key affects on prices strategy?
From a marketing standpoint, it is essential to be aware of the influences on prices. Some aspects could be exterior, others interior.
Amongst the external aspects, the nature of the industry and competition is crucial. The prices strategies would vary in business characterised by powerful competition, to those which are not. It is also important that competition should not be followed blindly, when coming up with pricing decisions.
When internal aspects are considered, cost constructions and corporate goals come into play. For instance, if the organization target is to increase market show, the rates strategies would vary to a situation where the goal was to increase net margins.
Many marketers and non marketing workers, completely disregard their aim for customer, when developing pricing strategies. How many times have we detected rates decisions being considered, without any guide whatsoever to consumer reactions/feedback. Pricing research within an under implemented aspect, in the marketing research spectrum. Marketers would do well, to associate their rates decisions to consumer response habits. This will improve the quality of charges activities.
The 'tactical' areas of pricing
Pricing is a very effective, tactical weapon, provided you understand how to flames it! For instance, pricing could be used to indicate geographic differences. Different price factors for different locations. (Examples, Gas, LP Gas).
If multiple market segments are being dished up, there's a possibility to practise differential charges. Premium prices in one segment. Penetration rates in another. This will enable different corporate and marketing objectives to be reached, successfully.
In the marketing of consumer durables, price centered allowances could be offered for 'trade-in'. Aged models of tvs, refrigerators can be shifted out of the market, by stimulating consumers to 'trade-in'. The great things about a trade - in prices strategy are two folds i. e. it motivates brand switching and also improvements consumers and the marketplace.
As outlined through this quick article, the value of carefully crafted pricing strategies are tremendous. By watching the strategic aspects of pricing, marketers will be able to take good thing about their strongest tool, in order to increase sales income and revenue.
Pricing decisions should be carried out in an integrative manner, giving due account to corporate goals.
"Results are gained by exploiting opportunities, not by fixing problems"