Hello people! I'm a newbie to this forum, and i'm pleased to meet you all.

I'm studying Marketing Plannning and the latest topic i've focused on is about Developing Price Strategies. One of the sub-topics i'm interested is the steps to setting the right price in the market. Suppose that there's a new company that wants to introduce a new kind of product/service and the marketing manager wants to find the just right price to reach the target market...what are those steps that are crucial to this implementation? If anyone knows about a real company that is doing the exact thing at the moment, please let me know,ok. Thank you all for reading.

Welcome to Pulse Today. Interesting subject btw.

Regardless of how unique a product or service may be, it is either similar to something or replacing something so I would perhaps start there for a base cost analysis.

Depending on your profit margins at specific price tiers, you could either undercut whats out there or if its really revolutionary, price it over market by what you think people would be willing ot pay for the extra convience or functionality.

Some good examples might be found in telecom. Alot of companies have or are rolling out IP based products to replace more traditional Frame Relay and ATM services. Its cheaper for the provider to maintain and upkeep and it offers the buyer a more transparent layer from application to transport for starters.

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Thanks for taking time to register at PulseToday nosgothic!

Well, Pricing of your product depends on the kind of brand that you are trying to persue with your product + what your 'exact competitors' are offering!

Some would go in for mass market with low profit margin and high volume, whereas some would go in for premium pricing and make high profit margins and low volumes. That totally depends on the kind of brand you are

For example if you are a premium brand targeted at the high income group AND you have a premium brand then you would go in for premium pricing. In this case you would not do much of MR for what your competitors are offering as you yourself have a distinct product!

However, if you have are targeting to a lower income group where your profits are lower then you would obviously need to see your competitors and actually do MR about what impact your pricing would have on your target audience.

You can take example of Car Companies, telcos and companies in FMCG segment. For that matter... both kind of players exist in every segment!

Hello to everyone, especially to PhoenixDown and Pulse...

Thank you very much for the instant replies. I think what both of you said does have a good point in setting the price strategies. One must consider the market segementation - who are the target market, who are the purchasing group, and what is the level of their income to see if they can afford the product/service. If you're targeting the low income group,you might want to set low prices and produce in large volume. Customers will buy the goods when there's big discounts or sales gimmick (E.g. Buy 1 get 1 free, free toys or samples included with goods) offered. However, the customers will perceived these cheap goods are bargainable and of lower quality. This might affect the company's reputation in the marketplace, regardless of whether the company is using a one-line distribution or diversified one. (i.e Different goods sold from the same company.) RHYTHM Distributors Pty. Ltd. is an example of diversified distributional company. (It sells stationery supplies to reference books and music books). Click here to find out or copy-and-paste on another browser: http://www.rythm.com.my

This goes the same for the prestige pricing (in a vice versa way). High-priced goods will be perceived as of higher quality, nett price, non-bargainable types. Therefore only the high-class people can afford to buy. Quantity of the products/services may also be limited and discounts rarely offered unless these buyers become an exclusive member of certain shops or retail outlets that sell these goods or service.

However, this is just a matter of opinion and based on my studies alone. Any comments anyone like to add to my post? I'd welcome to it. Thank you for reading.

Also don't be afraid to use the $*.95 trick.

It's a proven marketing strategy that gets results. $49.95 for some reason always is more appealing than $50.00. Customers feel like theyre getting a deal.

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Hello people!

Can i ask something about product line? Does it refer to a direct disribution of products under its family name, or do you have other kinds of opinions?

I personally would agree with defining a product line as all the products being marketed under a single brand either through direct association with the brand or an indirect one!