Alpha

GROUP PROFILE
Santa Paul -1729
 

Jesmin Akter Jui - 1730

 

Homa Zader Khan - 1731

 

Afrin Sultana -1732

Sahara Sultana -1733

 

Afrena Jahan Prema -1734

 

Jesmin Akhter -1735

 
Market -Skimming
•Setting a higher price for a new
product

•Grabbing profit from it

•Decreasing the price after a

while

•Gaining a second round of profit

from the lower prices

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Appropriate Use of Market-Skimming

•Reputable and pre-established brand image

•Inability of competitors to undercut prices

•Making small volumes of the product must not

increase costs

Example
When LG introduced it’s G series phone the
price was around 600 US$ but three months
later the price was around 400 US$. So it was
LG’s strategy to gain higher revenue at first
and then again getting second round of
revenue by reducing the price.

1734
Market-Penetration
• Setting prices that are exceptionally low

•Challenging competing company products that

already have a large market share

•Grabbing there market share and earning high

profits from it

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Appropriate use of Market
Penetration
•Producers is in a price sensitive market

•Production and delivery costs decrease as sales

volume increase

•Low prices must keep out competitors

Example
Dell used penetration pricing to enter
the personal market, selling high
quality computer product through
lower cost direct channels

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 Contrast

Market Skimming Market Penetration

• Setting a higher price • Setting low price
• Target segment • Mass segment
• High margin • Low margin
• Skim the cream • Penetrate the market

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9-Ending or just below pricing

• The left digit is

reduced from a round
number by one
percent.

1730
5 Products:

Johnson
Maggi
Food Shoes Cloths or Soup
baby
products

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• Makes the item appear cheaper
than they really are
• Compare with the rounded figures
not fraction
• People focus more on the left most
digit
• Perceived smaller and more
affordable price
• Concern with the first number

Example:
Sometimes Pizza Hut, Aarong, Lotto
use 9-ending pricing tactic to obtain
customer response.

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• To combine several products and offer
the bundle at a reduced price
• To offer discount or extra or gifts from
regular prices
• To increase sales and reduce inventories

• To promote their products

Maggi announced that if consumer buy 4

packets of maggi soup, they will get a
food container.

And Johnson’s often bundle their offer

with various products.

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Reasons of using 9-ending pricing tactic
• Giving a image of being a bargain or discount

• Increasing sells and market share

• Grabbing more buyers attention to their products

• Making the price seem lower

• Earning more from the fractional figure

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Franchise Organization

A contractual vertical marketing system in which a channel member

called a franchisor, links several stages in the production-distribution
process.

• It is a simple method for expanding business through a licensing

relationship.

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Report on 7-Eleven
7-Eleven is the world’s number one convenience store and a top five
Franchisor.
7-Eleven focus stays fixed on making life easier for customers.

“7-Eleven will always there for you”

1733
 Market opportunity of 7-Eleven

• Freshness food offering

• Discounts
• 24/7 Availablility
• Well cooperation
• Growing Demand
Alpha
A Study

JC Penny and the Effects of

Different Pricing Strategies
Company Overview

1731
 Company History
• Started as a single outlet in 1903 which quickly evolved into a
chain of 3 stores by 1909.

• Stores incorporated as J C Penny Company in 1913.

• Now operates around the US, Canada and Puerto Rico.

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 Operations

• A chain of departmental stores that sells general

merchandise.

• Mainly located in suburban shopping malls.

• Also houses several leased departments such as Sephora,

Salon, Jewelry repair etc.

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 JC Penny’s Pricing
Model

Promotion based pricing strategy and Fair and

square pricing strategy
1
 Promotion based pricing strategy and it’s
effects
• JC Penny would mark up the price of a product to create room
for discounts.

• Would include reference prices recommended by manufacturers

to compare their prices.

• This proved to be very popular with the customers and

provided JC Penny with high sales and profit margins.

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 Fair and Square Pricing Strategy and it’s
Effects

• But in Feb 1 2012 they switched lower prices policy called ‘fair
and square pricing policy’.

• The profits dropped by 25%, so it can be seen the change in

pricing strategy was ineffective.

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Analysis of Pricing
Models
Why the Fair and Square Pricing Model proved
ineffective
• While companies like Walmart and Seven Eleven can thrive on this
model, if a company like JC Penny who positions themselves
around brands and quality suddenly start offering lower prices,
customers might doubt the quality .

1731
• A Large Portion of JC Penny’s customers buy products based on
discounts. Without discounts, the large portion of customers will
not likely buy from them.

• As the reference prices were removed, Customers have nothing

to compare price and value against.
“The best advertising is
done by satisfied
customers”
-Philip Kotler
Social marketing advertising
•Sociology of information

•Influencing the consumer for promotion

•Positivity in behavior

•Trusted by many people

•Expansion of the market

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“Life is more valuable
than time”

“Everything is not for money”

“Sometimes the smallest

things is the best gift”
Criticism

•False/deceptive

• Misleading Consumers

•Highlighting positive
aspects

•Lack of proper
information

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The Public relation society of America (PRSA) is the
world’s largest association for public relations (PR)
professionals, overseeing more than 21000 members

• It provides training , sets and promotes ethics

and standards for the global PR professions.

1732
The field of public relations seem to
encompass
• Corporate communications
• Crisis communication
• Executive Communication
• Internal communication
• Marketing communication
• Media communication
• Social communication

1732
Silver
Anvil
Awards

1732
Report on Starbucks

Starbucks Coffee Company received sliver Anvil Awards of excellence for

their green marketing and sustainability and for integrated
communication campaign which focused on five key milestones that
underscored Starbucks commitment to environmental responsibility and
the customer experience. They replaced their paper cup with reusable mug.
These action can save seven trees each year.

1732
Sales
Promotion

1729
Sales Promotion
“Short-term incentives to encourage purchase or sales of a product or a
services”

Its aim is to increase immediate customer sales

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Major Types of sales promotion

Customer Promotion

(Directed at Customers)

Trade Promotion

(Directed at resellers)

Business Promotion

(Directed at sales force)

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 Types of Trade Promotions

Free
Advertising Push
Free Goods specialty
Price Off allowance money
Advertisi
ng items

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Trade
show

1729
Decisions must be made for sales promotions:
•The size of the incentives

•Conditions for participations

•Methods for promoting and distributing promotional program

•The length of the promotion

•Evaluation

1729