Pricing and Sales Promotion Free Sample †MyAssignmenthelp.com

Question: Discuss about the Pricing and Sales Promotion. Answer: Introduction Pricing strategy plays an important role in determining the competiveness of the business organizations in the market. On the other hand, various aspects such as the brand value are being considered in determining the pricing strategy for the organizations. For the contemporary business organizations, pricing of the products or services are being done based on various aspects rather than just depending on the quality (Allender Richards, 2012). Organizations such as Coca cola and Apple price their products much higher compared to their production cost and still enjoys huge turnover in the market. This essay will discuss about the pricing strategy of Coca cola and Apple along with discussing about the aspects that they considers in pricing their products. Pricing strategy of Coca cola and Apple In the case of the Coca cola, the key raw material for them is water, which is having marginal or no cost. Thus, Coca cola involves very less amount in sourcing the raw materials and with all the production facilities and process; they can sell their products at half the price, what they are selling now. However, they are selling in much higher price due to the fact that, the substitute products as priced similarly and customer have no other options to have carbonated drinks in fewer prices. Moreover, the brand value also attracts the customers to have their products despite of charging more (Allender Richards, 2012). Customer information is being determined by them in implementing their pricing strategy. According to them, the price that customer pays for buying Coca cola is negligible to their consumption budget and thus no one pays much attention whether coca cola is charging higher or not. In addition, the brand value that Coca cola have created is quite positive and highly pene trated in the global market (Aaker Joachimsthaler, 2012). Thus, if Coca cola will charge more prices for their existing products, then also customers will buy more of it by perceiving that quality is being enhanced with the price. In the case of Apple also, they charge much higher compared to their production cost. It is true that Apple use highest quality standard in manufacturing their products, but still they can offer their products is less price compared to their exorbitant prices. The approach of Apple is to offer innovation and exclusive products to the customers. According to the customer information being gathered by Apple, premium pricing will help to create niche market and exclusive products (Heracleous, 2013). Thus, customer will be interested to pay more for it. Moreover, the innovation that Apple is offering is creating monopoly for them in the market, which allows them to charge more prices. By initiating the premium pricing, Apple enhance the exclusivity of their products, which further increase the appeal among the customers. By gathering the customer information effectively, they have targeted the desire of the higher income segments of having exclusive products. More, the promotion and posi ting strategy of Apple also helped them in determining their pricing strategy. This is due to the reason that, Apple has positioned their products in such a way that, the products of Apple are being perceived as the status symbol and recognition of achievement (Kapferer Bastien, 2012). Thus, the customers are more motivated in paying the extra amount that they are charging to buy the products of Apple. Conclusion Thus, from the above discussion of the pricing strategy of Coca cola and Apple, it is been seen that though their production cost is much lower, but still they are having huge turnover in the market by charging more prices. It is being discussed that, other than production cost there are various aspects that are considered in determining the price of the product. Effective determination of the customer information along with having positive brand value in the market allows these organizations in charging higher prices from the customers. Both these organizations have segmented their target market effectively along with effectively tapping the buying criterion of the customers. Referencs Aaker, D. A., Joachimsthaler, E. (2012). Brand leadership. Simon and Schuster. Allender, W. J., Richards, T. J. (2012). Brand loyalty and price promotion strategies: an empirical analysis. Journal of Retailing, 88(3), 323-342. Heracleous, L. (2013). Quantum strategy at Apple Inc. Organizational Dynamics, 42(2), 92-99. Kapferer, J. N., Bastien, V. (2012). The luxury strategy: break the rules of marketing to build luxury brands. Kogan page publishers.