Competitive pricing strategy

Welcome to my competitive pricing strategy. Competitive pricing strategy built on keeping prices competitive in the firm, and is usually implemented in the following forms:
1. The strategy of market penetration based on the use of economies of scale. Used to introduce new products to market and enhance the former position. Examples include the growing number of stores that sell at lower prices, manufacturers, and associations for the displacement of speculators from the market by lowering prices.
2. Strategy on "development curve" based advantage of the expertise and relatively new low costs compared with competitors. A necessary condition for the implementation of this strategy - the impact of the experience of companies and the sensitivity of customers to the price level.
3. Strategy alarm rates based on the use of trust by buyers to price mechanism set up by competing firms. Often used when counting on new or inexperienced buyers are not aware of competing products, but consider quality important.
4. Geographic Strategy - relates to competitive pricing for the relevant market segments.
Pricing Strategy assortment applies when a firm has a set of similar, related or substitute goods. Here you can select the following strategies:

1. Strategy "set" is used in terms of uneven demand for substitute goods. The strategy encourages increased sales, as set offered at a price below the price of its elements. For example, complex dinner, cosmetics.
2. Strategy "set" is based on different assessment customers one or more products of the company.
3. The strategy "above par" is used by the company when it is faced with the uneven demand for replacement products and how it can earn additional income through economies of scale.
4. Strategy "image" is used when the buyer focused on quality based on the prices of interchangeable products. With this pricing, firm represents the market version is identical to an existing model under a different name and at a higher price. For example, sales of environmentally friendly products ( "green icons"), ie the price increased more than the quality of the implementation of this strategy.
Thus, pricing is one of the most important and most complex issues. The choice of general orientation in pricing approaches to pricing on new and already released products, services provided in order to increase sales volumes, turnover, improve production, maximize profits, and strengthen the market position of the company is carried out within marketing.

Setting prices - an important element of marketing that directly affects the sales activities, as the level and ratio of prices for certain products, in particular on competing products, have a determining influence on the amount committed by customers purchases. Prices are in close relation to all elements of the marketing and of the company as a whole. From prices depend largely on commercial real results and true or false pricing strategy provides the long-term impact on the firm position in the market.
Targeted pricing strategy in marketing is this: to be set for products such as price and change them depending on the situation on the market to seize some market share, is scheduled to receive the amount of profits, etc., that is, in fact, solve operational tasks related to the sale of goods in a certain phase of its life cycle, respond to competitor activities etc. This provides both the strategic objectives.

2.Prakticheskoe task
Furniture Factory decided to buy a subsidiary specializing in the manufacture of household machinery, which has a high reputation but experiencing financial difficulties.
1. In what the reason for this decision
Furniture Factory, acquiring subsidiary for the production of household appliances, has developed a strategy for financial investments.
The essence of this strategy is the investment in a new area of production. Purchased the company has a great reputation, and hence the popularity of the market, producing high-quality products and popular brand. This will positively affect the image of the parent company and at stabilizing the financial situation; the subsidiary company will bring good returns.
In addition, the furniture factory insures itself from liquidation. If the furniture will cease to recoup itself because of competition or any - reason, the company will have other activities and, therefore, does not cease to function.
2. What forms and methods of sales promotion could use the company to survive in competition with manufacturers of home appliances?
When selecting developer tools sales promotion incentive plan the company must take into account the type of market specific tasks in the area of sales promotion, current situation and profitability of each event to promote.
Consider the basic means of sales promotion aimed at the buyer:
1. Discounts. This certificate, giving the consumer the right to the agreed savings when buying a particular product. Discounts can be distributed by mail, to make other goods, placed in magazine and newspaper ads. The percentage of repayment varies depending on the method of distribution. Repaid about 2% of newspaper coupons, about 8% of coupons sent by mail, about 18% of coupons attached to products. Discounts are effective in stimulating sales of famous brands and increasing interest in new ones. Experts believe that coupons provide savings of 15 to 20%.
2. Cash compensation (discount) - price discounts implemented after the purchase. The consumer sends any form of proof of purchase to the manufacturer, which reimburses part of the cost paid by postal order.
3. Goods at a discounted price (price reduction). The packaging or product label is located a proposal to reduce the normal price. This may be a supply of goods at a reduced price due to special packaging (eg two packs for the price of one) or as a set of relevant goods (eg, toothbrush and toothpaste). Offer goods at a reduced price able to stimulate short-term sales growth more effectively than even coupons.
4. Prizes (gifts) - products offered at very low cost to them for free as a promotion for the purchase of another product. Award "in the package" accompanying the goods being inside or outside of the package. As a prize may be the packaging itself if it is a reusable capacity. Free mailing prize - a commodity that are sent to customers who purchase presented, such as a piece of packaging or barcode. Samootkryvayuschayasya prize - selling goods at the request of the consumer at a price below normal. Today, manufacturers offer bonuses in the form of a variety of products from the company name on the package.
5. Prizes (contests, sweepstakes, games). As a result of buying the opportunity to win a cash prize, a trip for leisure or product. This kind of competition the consumer should imagine anything - a poem, a project of value proposition. A special jury selects the best. Lottery requires that consumers howled about his participation in the drawing. In the course of the game with every purchase consumer gets something - room to play bingo or missing letters that can help him win the prize. Prizes attracted more attention than coupons or small prize.
6. Rewards for loyalty to a seller - cash or other discounts proportionate degree of loyalty to a particular retailer or group of retailers. Special trade press also represent a reward for consistency if the consumer uses a particular vendor. Then he can exchange the seal goods in specialized center or ordered through the mail directory.
7. Free trial samples - invite prospective buyers for free product testing to calculate that they will buy it.
8. Guarantees - written or verbal assurances from the seller that the product is suitable for use for some time and that otherwise the seller will restore the quality of the product or return the money to the buyer.
9. Co-stimulation - two or more companies or brands together, offering coupons, competitions or compensation. Using common incentives, the company hopes to attract more attention and expect that their sales agents more effective joint efforts will bring the goods to retailers, which offer advantages in advertising shows the case of the point of sale.
10. Cross-stimulation - one brand of goods used to advertise other. For example, in the packaging of one product can provide a coupon for another product of the famous brand.
11. Demonstrations at points of sale. Unfortunately, many retailers do not like to mess with exhibition facilities and signs and placards, which they annually receive hundreds of manufacturers. In response, manufacturers offer not only more sophisticated advertising design, but also offer mount it on their own.
3.Sformiruyte set of services that could provide firm and assess their importance for the consumer
When selling home appliances, no small role and minor services that enhance the competitiveness of the product and make it more attractive to the consumer. These include:
· Delivery of goods to places of consumption. Underlying economic goods delivery is the ability to correctly use the transport charters, codes, rules, traffic, transport tariffs and other key documents in this field;
· After-sales service provided to customers with warranty and post-warranty service. Currently buyer to the seller makes the goods requirement: the service must provide product performance throughout the life. Seller for its part promotes to buyer expectations were met and therefore the organization strong customer service and its efficient operation is a primary concern for any company that wants to act successfully in the market. Company services must follow the basic rules of effective customer service. This requires:
· A well prepared strategy, determining the optimal level of service for each market segment;
· Skillful use of advertising that communicates to the buyer all the benefits of the service and guarantees a strong relationship with the customer by the buyer;
· A clear system of supply of spare parts;
· System rules call for service to the customer;
· Training of personnel associated with each artist bringing service standards.
Service is divided into pre-sale and after-sales and last - in warranty and post.
Pre-service is to eliminate the problems caused by the transport of products to bring it in working condition, testing, product demonstrations buyer at work, etc.
During the after-sales service company conducts preventive maintenance and repair, spare parts supplies, giving advice on effective use of technology. According to the customer are manufactured product sold modernization and additional staff training. Problem-warranty repairs - reduce downtime, increase turnaround time, increase operational safety and, ultimately, gain a strong position in the market and achieve competitive products.
Promotion - Encouraging customers to these purchases of goods to purchase large shipments, regular commercial relations - raises a number of services. In sales promotion often used after-sales that accompany the "gifts" distributing free product samples, free transfer of goods in temporary use "on trial" for the realization of large quantities of goods, welcome old product as a down payment on a new thing.
Services provided by companies in the marketing of products will undoubtedly increase the attractiveness of the product, making the product the most competitive and selling. These include:
· Delivery of goods to places of consumption.
· After-sales service provided to customers with warranty and post-warranty service.
· A well-prepared strategy, determining the optimal level of service for each market segment;
· Skillful use of advertising that communicates to the buyer all the benefits of the service and guarantees a strong relationship with the customer by the buyer;
· A clear system of supply of spare parts;
· System rules call for service to the customer;
· Training of personnel associated with each artist bringing service standards.
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