Marketing Mix PRICE

"Price is the amount of money customers must pay to obtain the product." (Marketing: An Introduction, Armstrong/Kotler - pg. 57)

The most important question that should be asked when determining a price should not be "what is the competition doing?" but, in fact, this: "what is the value of my product and what are consumers willing to pay for it?" You can offer more than the competitor at a higher price, but is the consumer market going to feel like they are getting more for their money? All of these things need to be considered when pricing a product, as well as the cost of distribution and implementation: will you make a profit after cutting out the piece of the pie for the other guys? "In assessing competitors’ pricing strategies, the company should ask several questions. First, how does the company’s market offering compare with competitors’ offerings in terms of customer value? If consumers perceive that the company’s product or service provides greater value, the company can charge a higher price. If consumers perceive less value relative to competing products, the company must either charge a lower price or change customer perceptions to justify a higher price." (Marketing: An Introduction, Armstrong/Kotler - pg. 280) So what separates Candy Striper from other premiums? It is organic, which means less calories, and.. maybe even a little bit healthier for your body -- but do people really drink alcohol to be healthy? No way! Candy Striper may not be distilled five times or separately filtered, but extra steps are not necessary when you use pure mountain spring water. If you're looking for the perfect sized stocking stuffer, you can pick up a 750ML bottle of Candy Striper for only $20! If you need a bigger supply for that office party or simply to keep in stock around the house, a 1.75L is only $40 (cheaper than a goose but every bit as delicious).

"The first three steps in the marketing process—understanding the marketplace and customer needs, designing a customer-driven marketing strategy, and constructing marketing programs—all lead up to the fourth and most important step: building profitable customer relationships." (Marketing: An Introduction, Armstrong/Kotler - pg. 13)