Assignment:
Below is the question the writer1 and writer 2 answer
You want HOW much for that bag?
Why can Prada sell a handbag for $2,000 that costs the firm a little more to manufacture than the $200 bag sold at a department store? At the other end of the pricing spectrum, why would a consumer goods company provide a coupon that makes their new snack product all but free? We learned in the text that there are a number of pricing strategies firms can use to achieve their marketing objectives. Do they want to build market share, create a perception of exclusivity, or simply get you to try those new cookies?
Consider the product you are using for your marketing plan. How would you price it to achieve your objectives? Describe the pricing strategy you would use to introduce your product to the market, and why you selected that strategy over other options. Is your choice a long-term or short-term strategy? What advantages or disadvantages do you foresee? Suppose that sales are not meeting your objectives, what change might you make in your pricing?
By the way, that $2000 Prada bag may seem like lot of money for a simple handbag, but it is not even close to top of the pyramid. For that, check out the Tanaka designed bag sold by Hermes for a staggering $1.9 million. Why not order two?
Writer 1
I really love to use coupons sometimes I even use them on products that I might not have ever bought at regular price. In my Store Everyone's closet my strategy is to offer the sellers at 10% add on when they sell their clothes their for I can drive my inventory to a manageable place and then for the buyers I will offer a discount of buy two items of clothes and get one free. This will help to find sellers and buyers and create a good relationship with the customers. The only disadvantage this might bring about is if I have more buyers then sellers then I will have no inventory or styles that people might not want what we like and then the word spreads that it might not be worth it. Our goal is to give everyone a great experience and if we don't have their style look into getting it the next time the come. Then once we have a steady stream of sellers and buyers I would drop the discounts and start a discount card so for every 10 items they get a free one. At first my choice of discount will be short team and then turn it into a long term discount for customer loyalty.
Writer 2
Prada can charge 10 times the price because they have done a great job associating their brand with a perceived higher value. The market enables this because of the vanity of item and price is not necessarily the market driver. Cookies, on the other hand, do very little for vanity. While there are some brands who are associated with higher quality which can therefore command higher prices, mass-produced cookie makers have a harder time charging 10 times more because the market is more price conscious. There is also a continuous market for cookies while purses may be a once or twice a year occurrence. Offering free cookies to this continuous market ensures that the brand will at least get considered for the next purchase.
The product / service I am creating a marketing plan for is also in a price conscious market. Entry level purchases / usage will probably be free with product / service upgrades available for additional fees. This will, more-than-likely, be a long term strategy. While there is a potential disadvantage to offering a free entry level / product or service, it does lower the risk for the wary first-time customer. It also gives me an opportunity to build a rapport with the customer which will make an up-sell / cross-sell relationship easier to create.