INVESTIGATE WHATEVER MORRISON LOWER PRICES STRATEGY WILL ATTACT NEW CUSTOMERS AND REMTAIN EGSITING – Literature review Example
Investigate Whatever Morrison Lower Prices Strategy Will Attract New s) Presented To Submission
For a company to remain relevant and grow in the current competitive climate, it has to apply different techniques to ensure that they attract and retain a large number of customers. There are various factors that influence buyer’s behavior. Pricing is one of the strategies that are used by a company. It one of the most important components of the marketing mixes because it is concerned with making a profit. Pricing can influence the customer’s behavior either positively or negatively depending on the nature of the product. For luxurious products such as cars, increase in prices would be interpreted by customers as increase in quality. As a result increase in prices will result in greater sales (Kotler & Keller 2011: 239). On the other hand, increase in prices or normal good such as food stuff and detergents would result in decrease in demand for such goods. This is because normal goods have many substitutes and if one company raises the prices, customers will switch to cheaper substitutes.
A company can use pricing as a form of brand position as it reflects on the quality of the product depending on the characteristics of the target market. Then pricing strategy that a company adopts depends on the product life cycle, competition, and expectation for expansion. During the initial stages of introduction of a new product, a company adopts pricing strategies that will enable them penetrate the new market and create a huge customer base and it may not necessarily bring profits in the short run (Haig, 2011: 50). When there are few or no competitors in the market, a company can charge premium prices and customers will still buy their products since there are no major substitutes. Price leadership is also a common strategy used by company where they charge low prices to attract the largest number of customer in the market. The suppliers will influence the prices set for outputs which is tagged on the price for inputs. This influences the customers’ behavior on what they can buy and in what quantity. A company could also decide to use a varied set of prices depending on the target market (Gillett & Clan, 2012: 34). A company can decide to use captive pricing where the price of a certain product is low but the price of complementary products is high (Paul & Kapoor, 2008: 89). The company gets profit from the sale of the complementary product and not the main product. A company can also choose to adopt a low price strategy but charge premium prices for products that have the best features.
It has been observed that pricing is a major factor that influences the customer buying behavior on many goods. Reducing the prices of goods is one main strategy that an organization can adopt to attract a large customer base. We are living in an age when cost of life is very high. Slight reduction in prices of goods offered by different people would therefore results in a great change in demand of that good.
ANONYMOUS. (2011). Higher ambition: how great leaders create economic and social value. Boston, Mass, Harvard Business.
CZINKOTA, M. R., & A. RONKAINEN, I. (2007). International marketing. United States, Thompson.
DAHLVIG, A. (2012). The IKEA edge: building global growth and social good at the worlds most iconic home store. New York, McGraw-Hill.
Datta, D. & Datta, M. (2006): Marketing Management. New Delhi: Vrinda Publications
GILLETT, A., & KRAN, E. (2011). Speak better business English and make more money: Book and CD set. Ann Arbor, Mich: Language Success Press.
HAIG, M. (2011). Brand failures: The truth about the 100 biggest branding mistakes of all time. London: Kogan Page.
HOMBURG, C., KUESTER, S. & KROHMER, H. (2009): Marketing Management, a contemporary perspective. London: McGraw Hill.
KOTLER P. AND KELLER K. (2011). Marketing Management, 12th Edition (Upper Saddle River, New Jersey: Prentice Hall.
KOTLER, P. (2009): Marketing Management: Analysis, Planning, Implementation and Cotrol,9th.ed. NewDelhi: PrenticeHall.
KOTLER, P. (2012). Marketing Management, Analysis, Planning, Implementation and Control, 8th Edition. New York: Prentice Hall.
PAUL J. AND KAPOOR R. . International Marketing; Text and Cases. Tata McGraw-Hill Publishing Company Limited, New Delhi, India.
PRIDE, W. M., & FERRELL, O. C. (2012). Marketing. Mason, Ohio: South-Western Cengage Learning.
DENISON, D. R. (2012). Leading culture change in global organizations aligning culture and strategy. San Francisco, CA, Jossey-Bass.
FERRELL, O. C., & HARTLINE, M. D. (2011). Marketing strategy. Australia, South-Western Cengage Learning.
GILLESPIE, K., & HENNESSEY, H. D. (2011). Global marketing. Australia, South-Western Cengage Learning.
GRIFFIN, R. W. (2008). Management. Boston, Houghton Mifflin Co.
IRELAND, R. D., HOSKISSON, R. E., & HITT, M. A. (2012). Understanding business strategy: concepts plus. Mason, OH., South-Western Cengage Learning.
LEWIS, E. (2008). Great IKEA!: a brand for all the people. London, Marshall Cavendish Business.
THOMPSON, J. L., & MARTIN, F. (2010). Strategic management. Andover, Cengage Learning.