There are many different pricing strategies to help sell a product. These strategies include: Differential pricing, new product pricing, penetration pricing, product-line pricing, psychological pricing, and promotional pricing. The type of strategy that is going to be used depends on the product, target market, and the purchase situation.
Differential pricing occurs when different prices are charged to different buyers for the same quality and quantity of the product. New product pricing includes price skimming which results in charging the highest possible price that buyers will pay because of the desire they have for the product. This applies to the people who live by buying a particular brand and nothing else. For example, people may enjoy a certain brand of shampoo and I will pay anything for it because it is best for their hair. Penetration pricing is used by setting prices below those of competing brands to penetrate a market and gain a significant market share quickly. A good example of this I feel would be the new iPad. This product is reasonably cheap for the features that it offers, and competes with laptops. Product-line pricing establishes and adjust prices of multiple products within a product line. I think that this is a great strategy. Another example using shampoo would be the conditioner that comes with it. You will definitely buy that specific shampoo, and buy the conditioner that goes with it no matter what the price is because of the results. Psychological pricing attempts to influence a customers’ perception of price to make a product’s price more attractive. This would relate more to the branding of certain products. People will pay a price for quality, durability, and particular trends during that time. Promotional pricing is very attractive to customers because prices are set below the usual markup and look better to the buyers when compared with the original price.
I think that all companies should use promotional pricing at some point because customers are attracted to low prices. Penetration pricing seems to be the best pricing strategy to use because it involves pricing below the competition. As mentioned above, the pricing strategy depends on several factors which are all significant in different circumstances. Do you agree with this? Which pricing strategy do you believe is the most important to the buyer and seller?
4/10/2010
4/03/2010
Branding Response
This is in response to L.B.’s Blog:
How do you feel? Do you come to expect certain things from certain brands? Do you prefer and insist on certain brands or are you open to anything?
When it comes to certain brands, I am pretty open to buying anything unless I am making a large purchase. The way the product looks and the quality of it is usually most important to me. I don’t necessarily think that particular brands have a higher quality than generic brands. For example, Uggs are a brand of boots in which all college female students have except for me probably. I can’t imagine spending $180 on a pair of boots that are not necessarily durable. My friend has a pair of Ugg boots and since the winters are sometimes intense, the salt from the roads has ruined the leather. Just because that is the new trend doesn’t mean I am going to buy them. I like certain brands because of the way the products look, but not really because of the quality. The only product that was an expensive purchase of mine was my Dansko shoes. I needed them because I was always on my feet at work and my back was starting to bother me. Not only are the handmade and durable, but they are comfortable and help support you feet well. If I am going to spend a lot of money on a product, then I want something that will last me a long time so I won’t have to replace it quickly. Do you agree with this? Do you prefer certain brands over others?
How do you feel? Do you come to expect certain things from certain brands? Do you prefer and insist on certain brands or are you open to anything?
When it comes to certain brands, I am pretty open to buying anything unless I am making a large purchase. The way the product looks and the quality of it is usually most important to me. I don’t necessarily think that particular brands have a higher quality than generic brands. For example, Uggs are a brand of boots in which all college female students have except for me probably. I can’t imagine spending $180 on a pair of boots that are not necessarily durable. My friend has a pair of Ugg boots and since the winters are sometimes intense, the salt from the roads has ruined the leather. Just because that is the new trend doesn’t mean I am going to buy them. I like certain brands because of the way the products look, but not really because of the quality. The only product that was an expensive purchase of mine was my Dansko shoes. I needed them because I was always on my feet at work and my back was starting to bother me. Not only are the handmade and durable, but they are comfortable and help support you feet well. If I am going to spend a lot of money on a product, then I want something that will last me a long time so I won’t have to replace it quickly. Do you agree with this? Do you prefer certain brands over others?
Product Variable~ Branding and Packaging
Products surround us in our daily lives, and all across this earth. When we buy products, the brand on the label is usually important to the consumer. The brand consists of a name, term, design, symbol or other feature that identifies a seller’s product and differentiates it from a competitor’s product. People tend to buy products of certain brands because it is a sign of status, brand loyalty, provides a form of self-expression, and evaluates the product’s quality. I feel that if I am buying a product that is fairly expensive, I tend to search for a good brand of that product because I want it to last a while. I don’t buy products of certain brands just because it is the new trend. For example, I work in a restaurant and am always on my feet so I bought a pair of Dansko’s which have helped my back. So for me it depends on the product that I am buying.
Packaging is an important factor when buying products. It involves the development of a container and a graphic design for a product. Product packaging has functions involving the protection of the product from being damaged, convenience to customers, and communicating its features. Some people may enjoy buying a particular brand, but sometimes convenience is better and consumers will buy another brand of the same product. I feel as if the packaging is very important when attracting the attention of customers. My attention would be drawn more to a package full of color than a packaging with only black and white. People want heavy duty packaging for items that are especially fragile. For example, my parents bought a patio set and when they brought it home and opened it, the glass was shattered in an area of the table. So they were very disappointed and sent it back.
Overall the brand and packaging of products is very important when buying certain products. I think that it is very important to focus on these two aspects because they can make a difference not only for the buyer, but also the seller. Brands and packaging make the products stand out from others. Do you agree? Do you think that people focus more on the brands or on the packaging of products? Do you believe that they are both very important?
Packaging is an important factor when buying products. It involves the development of a container and a graphic design for a product. Product packaging has functions involving the protection of the product from being damaged, convenience to customers, and communicating its features. Some people may enjoy buying a particular brand, but sometimes convenience is better and consumers will buy another brand of the same product. I feel as if the packaging is very important when attracting the attention of customers. My attention would be drawn more to a package full of color than a packaging with only black and white. People want heavy duty packaging for items that are especially fragile. For example, my parents bought a patio set and when they brought it home and opened it, the glass was shattered in an area of the table. So they were very disappointed and sent it back.
Overall the brand and packaging of products is very important when buying certain products. I think that it is very important to focus on these two aspects because they can make a difference not only for the buyer, but also the seller. Brands and packaging make the products stand out from others. Do you agree? Do you think that people focus more on the brands or on the packaging of products? Do you believe that they are both very important?
3/26/2010
The Overspent American Response
This is in response to Bruce Wichland’s post:
How do you feel? Do you think this documentary is accurate? Are these issues blown out of proportion? Do we have a spending problem?
I have the same beliefs about this new consumerism. I feel that this document is accurate to an extent. The media definitely plays a significant role in the way Americans consume. However, it is not forcing us to go out and spend money. It may have a little influence, but we have the choice to spend money on things we don’t need. As you mentioned, 25% of people with $100,000 of annual income say they do not have the money for basic necessities. This blew my mind because needs are not that expensive unless you live that lifestyle. If you can’t afford that lifestyle then you’re not meant to be living in it. Overall, some of these issues mentioned in the video are blown out of proportion for sure.
There is no doubt that we have a spending problem here in America. I bet that the majority of Americans have credit card debt. It is understandable if the debt is from medical needs or emergencies because sometimes these types of things happen when least expected. However, when a credit card is maxed out because of vacation trips and jewelry, then that’s a different story. We are all consumers and spend money on things we really don’t need. People need to realize those goods that they really don’t need and just want because their neighbors have it. Do you agree?
How do you feel? Do you think this documentary is accurate? Are these issues blown out of proportion? Do we have a spending problem?
I have the same beliefs about this new consumerism. I feel that this document is accurate to an extent. The media definitely plays a significant role in the way Americans consume. However, it is not forcing us to go out and spend money. It may have a little influence, but we have the choice to spend money on things we don’t need. As you mentioned, 25% of people with $100,000 of annual income say they do not have the money for basic necessities. This blew my mind because needs are not that expensive unless you live that lifestyle. If you can’t afford that lifestyle then you’re not meant to be living in it. Overall, some of these issues mentioned in the video are blown out of proportion for sure.
There is no doubt that we have a spending problem here in America. I bet that the majority of Americans have credit card debt. It is understandable if the debt is from medical needs or emergencies because sometimes these types of things happen when least expected. However, when a credit card is maxed out because of vacation trips and jewelry, then that’s a different story. We are all consumers and spend money on things we really don’t need. People need to realize those goods that they really don’t need and just want because their neighbors have it. Do you agree?
The Overspent American
“The Overspent American: Why We Want What We Don’t Need” was a very interesting video about spending and the idea of the new consumerism. There is a cycle of work and spend which consists of high productivity growth leading to higher income and more spending. People began working more and more over the decades to buy the things that they want and need. It is believed that the American dream has expanded as we move into further decades and more is expected of Americans. We used to think of the American dream as a small house with a white picket fence, a dog and a cat, two children, a car, and maybe a garage. Now it is said that everything has doubled and people want more.
The idea of the new consumerism is that people want to mirror the image of a six-figure income when in reality that is not possible for them. The three factors that led to this idea are: 1. Women began to move out of their neighbors and into workplace for more exposure to reference groups. 2. Income distribution moved to more inequality throughout the decades making the rich richer. 3. The role of the media played a role because they were always bias toward showing upscale consumption through high levels of advertising. We also think of competitive consumption because we want the same or more of what other people have.
Products were branded with “the name” on everything in the 1970’s which ranged from water to coffee to t-shirts. The well educated consumers were willing to pay for status premium. Private consumption began crowding out public good while leading to a diminished social health. Consumerism is taking place of human interaction. Since so many parents are working more and not spending as much time with their children, they are buying more and more for them. Basically, they are “buying their love” because they are not there and want to be good parents.
I agree and disagree with this video to some extent. I know this video is focusing on the middle and upper social classes, but we have the CHOICE to spend. Just because these advertisements are thrown into our faces doesn’t mean we have to go out and buy the products. They are not forcing us and making us go out and spend money. People are trying to be like everyone else when they can’t afford to have as nice of things. If you don’t have to money to pay for something you want, then you don’t need it. I understand that many needs such as the electricity, phone, food, and gas have all gone up and to some extent people do need to work more. However, our basic necessities are still here and will always be here. The things we want are expanding because of technology and innovations which look more appealing to us. I know some people who have a very high income and they are in debt because they think they can afford things when they really can’t. These people go on long vacations around the world and come home and brag about going there when the whole vacation is charged on their credit card. This is frustrating because it is their problem and not the idea of the new consumerism.
Do you agree or disagree? Do you think that overspending is caused by the people or media? Do you think that the American dream has expanded? Are you affected by the new consumerism?
The idea of the new consumerism is that people want to mirror the image of a six-figure income when in reality that is not possible for them. The three factors that led to this idea are: 1. Women began to move out of their neighbors and into workplace for more exposure to reference groups. 2. Income distribution moved to more inequality throughout the decades making the rich richer. 3. The role of the media played a role because they were always bias toward showing upscale consumption through high levels of advertising. We also think of competitive consumption because we want the same or more of what other people have.
Products were branded with “the name” on everything in the 1970’s which ranged from water to coffee to t-shirts. The well educated consumers were willing to pay for status premium. Private consumption began crowding out public good while leading to a diminished social health. Consumerism is taking place of human interaction. Since so many parents are working more and not spending as much time with their children, they are buying more and more for them. Basically, they are “buying their love” because they are not there and want to be good parents.
I agree and disagree with this video to some extent. I know this video is focusing on the middle and upper social classes, but we have the CHOICE to spend. Just because these advertisements are thrown into our faces doesn’t mean we have to go out and buy the products. They are not forcing us and making us go out and spend money. People are trying to be like everyone else when they can’t afford to have as nice of things. If you don’t have to money to pay for something you want, then you don’t need it. I understand that many needs such as the electricity, phone, food, and gas have all gone up and to some extent people do need to work more. However, our basic necessities are still here and will always be here. The things we want are expanding because of technology and innovations which look more appealing to us. I know some people who have a very high income and they are in debt because they think they can afford things when they really can’t. These people go on long vacations around the world and come home and brag about going there when the whole vacation is charged on their credit card. This is frustrating because it is their problem and not the idea of the new consumerism.
Do you agree or disagree? Do you think that overspending is caused by the people or media? Do you think that the American dream has expanded? Are you affected by the new consumerism?
3/13/2010
John Smith Response
This is in response to Bruce Wichland’s post:
What do you think? Should he sell of the names for his workers? Is it ethical?
Selling the names of the people he surveyed without telling them would definitely be unethical. I agree with you on the fact that he provided privacy to all of the information that was given up by the surveyors, and if he takes the action and sells the names he would make many people angry. Then as you mentioned he would have to take responsibility which could be difficult even though they all know he was the one to make that decision. These are all mentioned in the AMA Standard of Ethics and all marketers should use these values. Also as you said he could call up all 2,000 of the surveyors and ask them permission for him to sell their names. This would be ethical, but would take up too much time. I would say that he should do this because he would be harming less people. If he had more employees than surveyors then I might consider something else. Do you agree with this?
What do you think? Should he sell of the names for his workers? Is it ethical?
Selling the names of the people he surveyed without telling them would definitely be unethical. I agree with you on the fact that he provided privacy to all of the information that was given up by the surveyors, and if he takes the action and sells the names he would make many people angry. Then as you mentioned he would have to take responsibility which could be difficult even though they all know he was the one to make that decision. These are all mentioned in the AMA Standard of Ethics and all marketers should use these values. Also as you said he could call up all 2,000 of the surveyors and ask them permission for him to sell their names. This would be ethical, but would take up too much time. I would say that he should do this because he would be harming less people. If he had more employees than surveyors then I might consider something else. Do you agree with this?
3/08/2010
John Smith's Situation
Even though John Smith is in need of $8,000, he should not sell the names to the car dealer. This would be very unethical and would not follow the AMA Statement of Ethics. As stated in this document, marketers need to exhibit honesty, responsibility, fairness, trust, respect, transparency, and citizenship. If John were to sell the names, those $2,000 people would definitely lose trust in his marketing research firm because they were not truthful in what they did by not telling the people he was selling their names. John’s firm has to be honest in every situation that arises. If he desperately needs the money then he could call all of the $2,000 people and ask them if this would be okay to sell their names. However, this would be so time-consuming and may cost some extra money, but it would be more ethical than just selling the names. If the firm were to sell the names, John would have to take full responsibility for his actions. I feel as if this would be hard to do because most of those people would be furious to know that their names were sold. They would then most likely call the firm and want an explanation and I think this would be hard for John to do. He will be harming the people he surveyed along with his own firm. So John needs to find another way to obtain money because this situation is just too unethical for him to go about doing. Do you feel as if John should take the risk and sell the names?
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