Pricing strategy is the important element of the marketing mix which will determine the fortune of a business. It is an important strategic issue as it is dealing with the product arrangement. The product is Hot Nodle and the pricing of this affects other marketing features like product and promotion. There will be different strategies in determining the price of Hot Nodle. There are some steps to do before determining the price. There should be an analysis of the market, segmentation, and targeting. The product should be well defined and there should be proper distribution and selling techniques. In addition to this, it is essential to study the environment and the competitors. It is important to estimate the demand curve and set the pricing objectives. Price can be determined from all these facts.
Mission and Objectives
The mission of the pricing of the product called Hot Nodle is to increase the earnings in a business. The main objective of the pricing of this product includes profit maximization by lower costs and increasing the quantity of the product to be sold. Other objectives include survival and the recovery of the input in the business. “Pricing strategy should be an integral part of the market- positioning decision, which in turn depends, to a great extent, on your overall business development strategy and marketing plans” (Pricing strategies, 2010, para.3).
The pricing objectives of Hot Nodle rely on many factors including manufacture rate, continuation financial ranges, hurdles to access, manufactured goods segregation, etc.
It is important to consider the customers we look upon and have to be balanced with the product price and the quantity we supply. “Lack of knowledge about probable market response to the new product complicates the pricing decision. Several factors may affect the choice of a pricing approach for a new product, including the cost and life span of the product, the estimated responsiveness of buyers to alternative prices, and assessment of competitive reaction” (Cravens, 2010, p.331).
There will be tough competition in the pricing of consumer goods. So, we have to use the appropriate pricing strategy to compete with other competitors. Setting the accurate worth for a product is the most important process before thinking of the profit. It should be in the range of competing with other product’s prices and have to provide the best service to the customers.
Core Strategies have a crucial role in the marketing process. In pricing, it should consider all the matters depending on the product.
Communications and Promotions
To launch Hot Nodle in the market and to attract customers, there should be more activities in the form of promotion. These are mainly done through advertising and communication. This informs the customers about our new product and the worth of the product is announced. It can be made popular by providing some offers to attract the customers.
The product is a noodle called Hot Noodle, which is enriched with nutrients, protein, and health content. The product was innovated as the result of brainstorming and made available in the market after conducting strong research concerning the product. The appearance that makes the product new is the shape of the noodles. The main attraction is the busted form of this noodle that makes cooking easier.
The pricing objective of the company is very much distinguished and competitive. The product is the new product as a result of the Al brainstorming conference. It shows much differentiation from the other existing products in the market. The price for the product chosen is affordable as it is in the introductory stage in the market. The pricing method chosen here is the penetrated pricing to capture the market in the infantry stage. “The Penetration pricing is a marketing strategy that involves the use of highly competitive pricing to introduce a new product to consumers, or to introduce an older product into a new market” (What is penetration pending, 2010, para.3).
The pricing objectives of the firm are set at the starting stage of the discussion of the organization. “There are several different “Objectives” a company may orient themselves towards in order to obtain a profitable business situation” (Pricing objectives, 2001, para.1).
The main pricing objectives of the Hot Nodle Company are as follows:
- To achieve a monthly sales by 80%
- To maximize the profit in long-term operation.
- To increase the market share by 3% per year.
- To achieve a return of 40% in the first year of operation commencement.
- To maximize the monetary sales associated with the products.
- To position the product following the competitor product in terms of rate.
The Pricing Strategy
“One of the most difficult, yet important, issues you must decide as an entrepreneur is how much to charge for your product or service. While there is no single right way to determine your pricing strategy, fortunately, there are some guidelines that will help you with your decision” (Pricing strategy, 2010, para.1).
To establish the marketing strategy and perform the analysis, research and segmentation are required so that organizations can take good marketing mix decisions and identify the demand curve of the product and decide the quality of the product. The cost incurred in every operation and process is calculated and the cost and the variable cost are also identified to fix the price after the analysis of the environmental and the legal factors. The pricing objectives and strategy are selected in such a way as to make the product a mere success in the market and to have the maximum return from the same.
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What is penetration pending? (2010). Wisegeek. Web.