for ann harris

Creating the Marketing Mix

Crystal Randolph March 14, 2018 Colorado Technical University

MEMO-PRICING STRATEGY FOR MM

ACTION ITEM

To: Mitchell, Market Product Manager

From: (Crystal Randolph), Marketing Manager, Product Development

Date: March 13, 2018

Subject: Pricing Strategy for MM

AT ISSUE

MM would like to increase its sales by meeting the needs and interests of the global markets in its product development strategy. The management has decided to use two important pricing strategies to boost its sales and meet its financial objective in the coming year.

The Changing Nature of the Market

The mobile market possesses the characteristics of several companies producing diversified mobile products. The mobile phone companies and network operators purchase capacities from different network providers to develop their tariffs at discounted status. The situation focuses on providing the network and mobile products to end customers. The situation influences the aspect of planning for the accurate entrance into the market. With the hardship of the market, MM set prices as per the changing factors revolving around its operations. The pricing strategy entails developing a framework to establish reasonable profits. The company plans to establish permanent pricing strategies. The pricing strategies will serve as a significant factor when it comes to the introduction of new products in the market.

Pricing Strategies Implemented by MM

The international market possesses many factors that may affect the perception placed on the cell phones manufactured and sold by MM. In relation to the above, the company employs the following pricing strategies in the introduction of its products to the market:

Price Skimming

The first strategy has its implementation in the introduction of the new cellphones. It has its implementation and application to products associated with technology, a major objective for MM. The main objective of the approach entails the aspect of establishing high prices to assist in the recovering of the associated costs of producing the cellphones and the funds employed to propagate advertisement. The approach collects a huge amount of profits that the management may categorize into different sums. The management may reinvest the extra money to enable the additional production of the cellphones to reach the global markets and meet the needs of the growing demands (Davcik & Sharma, 2015). The management may also employ the extra funds acquired to expand the operations of the company in the international market.

The money may increase advertisement and marketing procedures to enable the customers in the market acquire accessibility to the cellphones without any problem. Demand for cell phones may have a relatively inelastic status for the company to use price skimming in the present and the future to save the company from falling. The above situation means that the customers in the market lack sensitivity when it comes to the prices of the cellphones and other services provided by MM. Due to the large status of the company in the market, it might become easy when it starts to introduce its new products in the market through the approach of price skimming. Companies with technical operations such as MM consider some of their customers as being a major factor in their financial growth. The main reason is that the prioritized customers are first in line when it comes to purchasing new cellphones.

Penetration Pricing

Penetration pricing as a strategy involves the aspect of the company wanting to enter new markets with the possibility of increasing its financial basis. A company may also use the strategy in entering an existing market. The key goal of the penetration pricing as implemented by the company establishes low prices to influence the attraction of many customers from its existing and new markets (Goel, Mahdian, Nazerzadeh, & Saberi, 2010). MM will strive to manufacture high-quality products to provide the customers with excellent cellphones and mobile related services. The situation enables the company to acquire a huge share of the market and increase its total sells as ownership in the market.

References

Davcik, N., & Sharma, P. (2015). Impact of product differentiation, marketing investments and brand equity on pricing strategies: A brand level investigation. European Journal of Marketing, 49(5/6), 760-781.

Goel, A., Mahdian, M., Nazerzadeh, H., & Saberi, A. (2010). Advertisement allocation for generalized second-pricing schemes. Operations Research Letters, 38(6), 571-576.