Week 1 Discussion 2 of Strategic Marketing Course

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Week 1 Discussion 2 of Strategic Marketing Course

Analyze the three pillars of successful pricing strategy implementation

The main objective of strategic pricing is profitability that requires management of more than one price level. A good pricing strategy is composed of five distinct choices that form the five levels of strategic planning; value creation, price structure, price and value communication pricing policy and price level (Nagle, Hogan and Zale, 2011). All successful pricing strategies are based on three pillars; pro-active, price driven and vale based. Value-based is pricing differences across customers that vary over time shows differences in customers’ values. For the success of this pillar, if a close competitor does not cut price, that provides customers with better alternatives, there is no need of value-based. Proactive means that companies anticipate disruptive events and in advance develop strategies to deal with them. For example, if there is anticipation of a new competitor, a company that is proactive will provide a lower priced option. Profit driven is the third strategy that means evaluation of a company is through its price management success of its earning relative to alternative investments rather than generated revenue that comparative to its competitors.

Nagle, T. T., Hogan, J. E., & Zale, J. (2011). The strategy and tactics of pricing: A guide to growing more profitably. Boston: Prentice Hall. 

Response to Lauren Sparks

Hello Lauren. I like your discussion concerning the three pillars in strategic pricing. You have stated and explained the three pillars; value based, proactive, and profit-driven principles. You have defined the pillars in simple terms and given an important key thing for each principle. The important key in creating a good value is estimating the combined benefits to customers. After understanding the creation of value for different segments of customers, is to create a pricing structure. The proactive pillar helps a company while it anticipates recession where it can develop a loyalty program that defines the trade-offs and terms of the anticipated interaction. I agree with your key point in the profit driven pillar that success should not be defined by comparison in completion and that revenue is not the definition of profit.  Marketers should know their customers well and strive to feed them according to their taste preference. Lastly, do you think there is need to motivate managers on pricing implementation strategies?

Response Kelly Prat

Hello Kelly, I like your discussion on the three pricing strategies pillars. These pillars as you have discussed include; know your audience, provide value, and to allow your business to be easy. In knowing the audience, the marketer should identify who they want to impress. This pillar focuses on what matters most to a customer. The second pillar which is provision of value answers the purpose of the marketing initiative. The third pillar is important in making business easy. The business should strive to provide a good user experience. Kelly, which is the most important objective of strategic pricing?

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