According to that, there are 7 types of pricing strategies in theory:

Penetration Pricing: Here the organisation sets a low price to increase

sales and market share. Once market share has been captured the firm
may well then increase their price.
Skimming Pricing: The organization sets an initial high price and then
slowly lowers the price to make the product available to a wider market.
The objective is to skim profits of the market layer by layer.
Competition Pricing: Setting a price in comparison with competitors.
Really a firm has three options and these are to price lower, price the
same or price higher.
Product Line Pricing: Pricing different products within the same
product range at different price points.
Bundle Pricing: The organization bundles a group of products at a
reduced price. Common methods are buying one and get one free
promotions.
Psychological Pricing: The seller here will consider the psychology of
price and the positioning of price within the market place.
Premium Pricing: The price is set to reflect the exclusiveness of the
product.
Optional Pricing: The organization sells optional extras along with the
product to maximize its turnover.
The cost of producing the product or service is also included in the price,
and it determines the lower limit of which the price can be set. The selling
price should always be higher than it costs to make the product in order to
make a profit. The marginal profit can be calculated to determine how much in
profit is made per item sold.
Components of price in the marketing mix not only include the actual
price of the product but also discounts and the availability of financing for
customers. For instance, a business may find it better to segment its market to
offer different pricing options. This is often done when software companies
create home and business versions of their products, for example, with the
business version having a higher price point. If the company will offer
discounted prices or opportunities for its customers to finance, the details
should also be included in the marketing strategy.
Comparing pricing strategies with the competition can also be
beneficial. A business should determine on which basis it wants to compete,

Penetrati
Skimmi
on
ng

such as by becoming a price leader, offering the highest quality, or becoming a

luxury brand. After determining this, the company should then set its price
appropriately in relation to its competitors. For instance, if the business wants
to be positioned as having the highest quality, it would not want to sell its
product at a cheaper price than others in the market.

Competiti
on

Product
Line
Penetration

Skimming
Bundl
e
Competition

Pricing Strategies

Product Line

Psychologi
cal
Bundle

Psychologic
al
Pricing is the only mix which generates a turnover for the organisation.
The remaining 3ps are the variable cost for the organisation.
It costs to produce and design a product, it costs to distribute a product
and costs to promote it.
Price must support these elements of the mix.
Pricing is difficult and must reflect supply and demand relationship.
To sum up, if a product is easily recognizable from other products, it would
probably have a brand name. And if it has one, it would need a suitable pricing
strategy to complement the brand name that should improve its brand image.

2.4.
2.4.1. Sales plan
Writing a sales plan is an integral part of developing and implementing the
marketing strategy. Businesses create sales plans to keep them on track in the
day-to-day work of advertising their products and generating revenue.
1. Set out your sales objectives
Start by setting out sales objectives for each of your products. What do
you want to sell, who is your target market and what are the timescales
involved? Decide where your focus will lie - whether that's on a specific
product or a client base, and what needs to change for you to meet these
objectives.
For each sales objective, list the steps you will have to take in order to
meet them. There should be five or six steps for each objective. Think
SMART when you are coming up with them:
Specific
Measurable
Achievable
Realistic
Time-sensitive
Consider how you will remove barriers to sales rather than asking how
you will make sales when you're coming up with your objectives.
Barriers can be anything from not making enough calls or customer
visits to the need to give your sales team better training or the need to
recruit another sales person.
Look at the marketing and sales activities your business has undertaken
and try to work out what your most profitable activities have been. This
could be over the course of the last month, three months or year.
2. Analyse your market
Find out why your clients need your company. Find out who they are
and the problem they needed to solve when they first approached your

business. Identifying why your customers use your business will help
you to approach new customers.
Make a list of five or six reasons why customers are better off using
your business. Differentiate between your business' features (what it has)
and benefits (what it does). Put yourself in your customer's shoes and try
to work out what they are looking for, and then try to match your
proposition to their needs. Make sure you emphasise the benefits as well
as the features in your promotional material.
List your clients' similarities and differences to help you create profiles
for each type of client. If you are starting a new business, try to find out
about competitors' clients: who are your existing, potential and key
customers? Rank the groups in order of profitability to give you an idea
of where you should be aiming to spend money.
If a client is costing you more than you are making from them, make
sure you have a good reason for selling to them. For example, if you are
selling to a large company, it might be that they are providing you with
regular revenue or drawing attention to your business in their
promotional activities.
Analyse your sales costs and try to cut down on your sales costs to
unprofitable customers. This might be by using an alternative
distribution method or cheaper sales channels.

3. Define the value of products or services. Identify the unique and

specific benefits product or service provides for the target population.
So, your product may save people money, improve their health or
advance their knowledge. Clarify the exact need that you are meeting.
Identify the value of multiple offerings. If you offer a wide range of
products and services, define the unique value of each. Also consider all
company plans to diversify the product line or to expand services.

4. Examine your pricing structure. Writing a sales plan is an opportunity

to establish a pricing strategy. Research similar products and services in

the industry and set prices accordingly. Prices should allow you to
remain competitive and still generate profits. Include plans for
incremental price increases in line with manufacturing costs.
5. Outline your long-term and short-term revenue goals. Be as realistic
as possible in your forecast. Use your recent revenue history as a guide,
accounting for significant changes in the market that may decrease your
revenue or create new opportunities in the future.
6. Identify ideal locations for your products and services. Opening a
new store location and making your products available to resellers are
possible options. Your sales plan should include where all of your sales
activity will take place and the costs associated with each location.
7. Define your advertising approach. Websites, print publications,
television advertising and banners are a few advertising options.
Evaluate the performance of each marketing strategy throughout the
history of your business and include the successful options in your
marketing plan.
8. Outline the activities of your sales and marketing team. Include the
sales strategies that have proven effective in the past. Cold calling,
attending trade shows and partnering with organizations are examples of
sales and marketing activities. Describe the approach that your sales
team will use both in the short-term and long-term to generate leads and
close deals.
9. Include all other revenue possibilities. Outline grant opportunities,
government proposals and all other revenue options in concrete terms.
For example, a goal to pursue government contracts can be described in
numerical terms as "identify and submit 6 government proposals in a 12month period."
2.4.2. Customer care strategy

Step 1
Develop a vision for the standard of customer care your company will deliver.
This takes the form of a statement, such as To become recognized as the
leader in customer care in our marketplace. Communicate the vision to all
employees so that they are aware of your commitment to realizing the vision.
Publish the vision on your website and in your marketing communications so
that customers are also aware of your commitment.
Step 2
Establish how customers perceive the standards of care your company
currently offers. Review any feedback from customers on customer care issues.
Ask staff who deal with customers to highlight any current problems. Carry out
Internet research on companies that are acknowledged as leaders in customer
care to identify factors that contribute to their success. Search on a term such
as customer care success stories. Use the customer feedback and your
Internet research to establish a benchmark for your customer care strategy.
Compare your current performance with the benchmark to establish the
priorities in your strategy.
Step 3
Identify the activities or business processes that impact on customer
satisfaction. Set out a framework for improving performance in critical areas of
customer care, such as time to respond to customer inquiries, delivery times,
accuracy of invoicing or ability to resolve service problems quickly. List the
customer care activities, identify the individuals or departments who deliver
customer care and set out the performance standards for each activity. The
framework provides overall direction for the company and focuses employees
on their role in delivering customer care. Establish a timescale for delivering
your strategy. Set key dates for achieving performance standards and include
dates for holding regular review meetings.
Step 4
Appoint customer care champions. Select managers and employees with a
commitment to high standards of care to take responsibility for coordinating
the implementation of your customer care strategy. Customer care champions
communicate the importance of customer care to other employees and work
with them to ensure they can meet the performance standards relating to their
jobs. By working closely with employees, they can also share best practices
and identify any training needs.
Step 5

Build an incentive and reward scheme into your customer care strategy.
Recognize employees who have made a significant contribution to customer
care by publicizing their achievements and offering them an award. Introduce a
competitive element into the program by setting targets for different
departments and rewarding the top-performing departments.
Step 6
Include a technology strategy, as well as a people strategy, in your customer
care strategy. Investigate technology that can improve convenience for your
customers. Setting up a self-service page on your website where customers can
find solutions to popular technical queries, for example, helps customers to
resolve issues quickly. Including a link to a customer service specialist for
additional support improves customer care and convenience even further.