Pricing Strategy

Price is only one of the marketing mix tools used by companies to achieve marketing goals. Before set the price, the company must decide products strategy. If the company has selected the target market and make the positioning carefully so marketing mix strategies including the price will be easily implemented.

Determination in the price of a new product can determine the success of these products in the market. There are some of the factors that affect the pricing issues such as internal factors which consists of the marketing objectives, marketing mix strategies, and cost considerations and organizational factors and the external factors which consists of market behaviour and market demand, competition and consumer expectations.

Speaking price means talking about how the image quality and how exclusive the product. High or low prices affect the perception of quality, so it determines the image of a brand or product. In the perception of consumers often apply the logic that the expensive price means good quality and cheap price, which means less quality. At a certain level set the price also means talking about exclusivity.

Pricing Management is not separated from the pricing objectives that are quite varied, ranging as means to achieve profit growth, revenue gain, image shifting, segment market leadership , product quality leadership and make new products.

Pricing strategies will be effective if applied properly in accordance with the characteristics of the products (new product / old, commodities / not, tangible / intangible) and the marketing environment, such as competition situation (tight or not, the market structure and behavior of consumers). In the products that are not tangible (intangible), the price should be able to present the image quality. And the Perceived value approach is the most appropriate approach.

In general, differentiated pricing strategy based on three main runway that is the price based on the cost price, based on demand and based oncompetition. The three strategy base can be described with a variety of approaches in the pricing strategy.

When a company has set a base price of the products or services, then the company can determine the pricing strategy withconsidering of various factors such as price competitor, company goals and product life cycle.
In the introduction of new products, there are two prominent price strategy, namely skimming and penetration.

1. Skimming Price
Skimming strategy is begin with set a high price when the new products launched and time to time will continue to fall in price. This strategy can be applied if the product is indeed have a competitive advantage compared to products that have been present. Products with technology inside is very suitable to use this approach. If we see electronic products and cellular phone almost all using this approach when is launched the price is still expensive, and then gradually decreased. Example : computer.

2. Price penetration
Price penetration strategy is determining the initial price as low as possible with the goal of market penetration to quickly and build brand loyalty from the consumers. Can be applied in the unfragmented market situation in different segments,and the product does not have a high symbolic value. This approach is also effective with the target whom market-sensitive prices.
Example: noodle.

Marketing Plan

Marketing plan plays a vital role in successful business ventures. The Marketing Plan explains how you're going to get your customers to buy your products and/or services. How well you market your product, along with a few other considerations, will ultimately determine your degree of success or failure.

The key element of a successful marketing plan is to know your customers their likes, dislikes, expectations. By identifying these factors, you can develop a marketing strategy that will allow you to arouse and fulfill their needs.

Identify your customers by their age, sex, income level, educational level and residence. At first, target only those customers who are more likely to purchase your product. As your customer base expands, you may need to consider modifying the marketing plan to include other customers.The marketing plan, then, will include sections detailing your:

Products and/or Services and your Unique Selling Proposition
Pricing Strategy
Sales and Distribution Plan
Advertising and Promotions Plan

The easiest way to develop your marketing plan is to work through each of these sections, referring to the market research you completed when you were writing the previous sections of the business plan.

(Note that if you are developing a marketing plan on its own, rather than as part of a business plan, the marketing plan will also need to include a Target Market and a Competitive Analysis section.

Products and/or Services

This part of the marketing plan focuses on the uniqueness of your product or service, and how the customer will benefit from using the products or services you're offering. Use these questions to write a paragraph summarizing these aspects for your marketing plan:

What are the features of your product or service?

Describe the physical attributes of your product or service, and any other relevant features, such as what it does, or how your product or service differs from competitive products or services.

How will your product or service benefit the customer?

Remember that benefits can be intangible as well as tangible; for instance, if you're selling a cleaning product, your customers will benefit by having a cleaner house, but they may also benefit by enjoying better health. Brainstorm as many benefits as possible to begin with, and then choose to emphasize the benefits that your targeted customers will most appreciate in your marketing plan.

What is it that sets your product or service apart from all the rest? 
In other words, what is your Unique Selling Proposition, the message you want your customers to receive about your product or service that is the heart of your marketing plan? The marketing plan is all about communicating this central message to your customers.