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Lots of factors affect the end price of a product, for example, the costs of production or the business need to maximise profits or sales. As NIVEA VISAGE Young is one of the leading skin care ranges meeting the beautifying needs of this market segment, it is effectively the price leader. Subscribe to our newsletter for current business news including lesson plans and activity ideas.
If you learnt more about The use of the marketing mix in product launch from this NIVEA case study, why not share it with others?
This page and contents, ©2016 Business Case Studies, is intended to be viewed online and may not be printed. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Economy Pricing• Economy pricing is a familiar pricing strategy for organizations that include Wal-Mart, whosebrand is based on this strategy. What is Price Penetration and lets have a looks at its advantages ?Penetration pricing is the pricing technique of setting a relatively low initial entry price, oftenlower than the eventual market price, to attract new customers.
Strategic Marketing Science provides nine different strategies for Pricing based on product quality (see below). The reality is sometimes Strategic Pricing is contextual to competitive pricing or other uncontrollable factors. Organisational resources, marketing effort, and budget also play in selecting the best Pricing Strategy. Advanced pricing strategy is about advanced marketing management: Real-time, for each individual segment! Value-based pricing uses buyers’ perceptions of value, not the seller’s cost, as the key to pricing. For many industrial products, the costs perceived by customers extend well beyond the price charged.

An industrial purchaser perceives the cost of equipment as including installation, maintenance, training and use of consumables, as well as the basic purchase price.
Equipment purchases are evaluated over their economic lives and comparisons between competitors go beyond straight price assessment. The company bases its price largely on competitors’ prices, with less attention paid to its own costs or demand.
In oligopolistic industries that sell a commodity such as steel, paper or fertiliser, companies normally charge the same price.
The smaller firms follow the leader: they change their prices when the market leader’s prices change, rather than when their own demand or cost changes.
If you have read this far, you are probably ready to engage a pricing strategy marketing consultant.
Remember, "Procrastination is the thief of time" and the sooner you act, the sooner you'll achieve your goals! Following is a table with some guidance on which costs you should consider for different decisions you would like to make. A product's price also needs to provide value for money in the market and attract consumers to buy. This strategy helps a business to gain maximum revenue before a competitor” product reaches the market.
Pricing strategy is importantfor companies who wish to achieve success by finding the pricepoint where they can maximize sales and profits. Its astrategy that can be effectively used when there is something unique about theproduct or when the product is first to market and the business has a distinctcompetitive advantage.
The strategy works on theexpectation that customers will switch to the new brand because of the lower price. Just email us by clicking this button, or fill out this form and a consultant will get back to you ASAP.

Value based segmentation techniques talks about defining segmentation based on value placed by customers on the product.
However, the company also had to take into account that the target market was both teenage girls and mums buying the product for their daughters.
NIVEA needs to regularly review prices should a competitor enter the market at the 'market growth' point of the product life cycle to ensure that its pricing remains competitive.
Companies mayuse a variety of pricing strategies, depending on their ownunique marketing goals and objectives. Premium pricing can be a good strategy for companiesentering the market with a new market and hoping to maximize revenue duringthe early stages of the product life cycle.Penetration Pricing• A penetration pricing strategy is designed to capture market share by entering themarket with a low price relative to the competition to attract buyers.
This meant that the price had to offer value for money or it would be out of reach of its target market.
Some commentators claim that penetration pricingattracts only the switchers (bargain hunters), and that they will switch away as soon as the pricerises. This can take the competitors by surprise, not giving them time to react.* It can create goodwill among the early adopters segment. Low prices act as a barrier to entry* It can create high stock turnover throughout the distribution channel. This can create criticallyimportant enthusiasm and support in the channel.* It can be based on marginal cost pricing, which is economically efficient.

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