BUSINESS (NO PLAGARISM A+ WORK, ON TIME)

WEEK 4 My Research Proposal Week 1: Nike Marketing Plan Proposal (No more than 250 words)

As you continue working on your final marketing plan in this course, pricing will be a crucial aspect of your plan. You will want to consider current branding efforts, the competitive environment, and the value this brings your market.

 

Research

 

Research pricing as it applies to your offering and industry( Research Proposal: Nike Marketing Plan Proposal.) Consider your options for pricing. Consider your market position in determining your price.

 

 

Discuss

· What will your price point be?

· Briefly discuss how you arrived at this price.

· How does this support your market position?

Reply to Discussion CS (No more than 100-150 words)

The company I am continuing to investigate is Peloton. Peloton offers a couple of different products and services; I will do a quick dive into each of them.

The first product Peloton launched was their classic Peloton Bike. Right now, on their website it starts at $1445. Their other bike option they have is the Peloton Bike+ which goes for $2,495. It was first released in 2020 and has a couple of more advanced features like a larger screen, louder audio system, integration with Apple products, and a swiveling screen which allows users to do other weighted workouts with their Peloton subscription. Pro tip! I have the Peloton Bike and there is a swivel assembly you can buy on Amazon to allow your screen to swivel to offer other workouts without having to spend an extra thousand dollars. Peloton offers refurbished bikes that will cost around $1,145

Peloton also offers two other pieces of equipment, their Peloton Tread which starts at around $2,495 and their Peloton Row which goes for $2,995. What I believe to be their biggest money maker is their subscription. Their all-access membership costs $44 a month and their Pelton App membership costs $12.99 a month, which is a bit more limited in what it has to offer.

My price point for their equipment would be to lower their basic Peloton Bike to $999 and market it as a base model entry level product. Additionally, as mentioned before, Pelotons subscriptions are their biggest money maker. I would like to introduce a tiered all access membership app from $35 a month (basic) to $55 a month (premium) and a tiered model for their digital app with a free tier, basic tier ($9.99 a month) to a standard tier ($24.99 a month).

I believe these new prices will keep Pelotons reputation as a premium and luxury workout brand. However, with the base model bike and tiered models of subscriptions Peloton may attract more people to give their products a shot and their higher price points will be less intimidating. Their free tier of their basic subscription could be a great tool to get people hooked, leading to them buying the more advanced subscriptions ultimately leading to them potentially buying one of their pieces of workout equipment. The same can be said about the base model bike price I proposed. People may be less hesitant to purchase it and fall in love with the product, leading to them wanting to try more of what Peloton has to offer and building brand loyalty.

This supports Pelotons marketing position by it keeps their reputation as a premium workout brand but lowers the barriers to entry for people. Peloton would have a great opportunity to show what their brand is all about, by introducing the new price points they can really focus on the quality of the classes they offer as well as the instructors leading the classes. The classes and instructors can be the ones that create or attract that loyal customer base that will keep coming back to Peloton and spread the good word about the brand.

Reply to Discussion NM (No more than 100-150 words)

Moving forward with my marketing plan focusing on TaylorMade Golf, pricing is a crucial piece of the overarching strategy. Taylormade has always considered itself a premium brand in the golf equipment industry, competing right along with companies like Titleist and Callaway. That being said, to expand into younger and more diverse demographics, the pricing plan of action has to balance approachability with premium perception.

Price Point:

The new offering would have a price point for the latest driver line of around $499-$529. This will be consistent with the current market status quo for top-of-the-line equipment, allowing TaylorMade to green-light innovation and quality. 

Arriving at this Price:

Researching competitors' pricing, and the majority of top-tier brands like Titleist, Callaway, and Ping set their latest drivers in a price range of $499-$599. By positioning TaylorMade just below the highest-priced options, it will maintain its premium image while also becoming slightly more attainable and accessible. This approach aligns with the goal of retaining loyal, experienced golfers while engaging them, all while not deterring the younger players who are new to the game and willing to invest in high-quality equipment. 

Supporting Market Position:

This pricing strategy fortifies TaylorMade's position as an innovative but attainable top-tier brand with state-of-the-art equipment. It will demonstrate merit through cutting-edge technology, performance benefits, and a strong brand reputation, thereby avoiding the pitfalls of being perceived as overpriced or bougie. It also leaves space for loyalty-building advertising, such as trade-in programs or student discounts, to help attract the new demographic without diminishing the brand.

References

Kotler, P., & Keller, K. (2014).  Marketing management (14th ed.). Upper Saddle River, New

Jersey: Pearson Prentice Hall

Grow, J. M. (2008). The Gender of Branding: Early Nike Women's Advertising a Feminist Antenarrative.  Women's Studies in Communication, 31(3), 312-343. http://ezproxy.apus.edu/login?qurl=https%3A%2F%2Fwww.proquest.com%2Fscholarly-journals%2Fgender-branding-early-nike-womens-advertising%2Fdocview%2F198272416%2Fse-2%3Faccountid%3D8289

Aversa, P., Schreiter, K., & Guerrini, F. (2023). The Birth of a Business Icon through Cultural Branding: Ferrari and the Prancing Horse, 1923–1947.  Enterprise & Society, 24(1), 28-58. https://doi.org/10.1017/eso.2021.22

Mapping, and Sharing, the Consumer Genome (2012). . New York Times Company.

Pricing Strategies in Marketing

Following are the different pricing strategies in marketing:

1. Penetration Pricing or Pricing to Gain Market Share

A few companies adopt these strategies in order to enter the market and  gain market share . Some companies either provide a few services for free or keep a low price for their products for a limited period, that is, for a few months. This strategy is used by companies only in order to set up their customer base in a particular market. For example, France Telecom gave away free telephone connections to consumers in order to grab or acquire the maximum number of consumers in a given market. Similarly, Sky TV gave away its satellite dishes for free in order to set up a market for them. This gives the companies a start and a consumer base.

Similarly, few companies keep their product cost low as their introductory offer is a way of introducing themselves to the market and creating a consumer base. Similarly, when companies want to promote a premier product or service, they raise the prices of the  products and services  for that particular time.

2. Economy Pricing or No Frill Low Price

The Pricing Strategies of these products are considered as no low frill prices where the promotion and the marketing cost of a product are kept to a minimum. Economy pricing is set for a certain time when the company does not spend more on promoting the product and service. For example, the first few seats of the airline are sold very cheaply in budget airlines in order to fill in the airlines, the seats sold in the middle are the economy seats where, and the seats sold at the end are priced very high, which comes under the premium price strategy. This strategy sees more economic sales during the time of recession. Economy pricing can also be termed as or explained as budget pricing of a product or a service.

3. Use of Psychological Pricing Strategies

Psychological pricing Strategies are an approach of gathering the consumer’s emotional response instead of his rational response. For example, a company will price its product at Rs 99 instead of Rs 100. The price of the product is within Rs 100, which makes the customer feel that the product is not very expensive. For most consumers, price is an indicating factor for buying or not buying a product. They do not analyze everything else that motivates the product.

Even if the market is unknown to the consumer, he will still use price as a purchase factor. For example, if an ice cream weighted 100 gms for Rs 100 and a lesser quality ice cream weighted 200 gms is available at Rs 150, the consumer will buy the 200 gms ice cream for Rs 150 because he sees profit in buying the ice cream at lower cost ignoring the quality of the ice cream. Consumers are not aware price is also an indicator of quality.

4. Pricing Strategies of Product Line

Companies define product line pricing as pricing both a single product or service and a range of products. Let us take and understand this with the help of an example. When you go for a car wash, you can choose a car wash for Rs 200 or a car wash and a car wax for Rs 400, or the entire package, including a service, at Rs 600.

This strategy reflects the strategic cost of making a product popular and consumed by the consumer with a fair increment over the product or service range. In another example, if you buy a pack of chips and chocolate separately, you end up paying a separate price for each product; however, if you buy a combo pack of the two, you end up paying comparatively less price for both, and if you buy a combo of both in a higher quantity you end up paying even lesser.

For the manufacturers of the product, manufacturing and marketing of larger packs is much more expensive as it does not fetch them a good amount of profit; however, they do the same to attract more consumers and keep their interest in their products. On the other hand, manufacturing smaller packs and lesser quantities is more beneficial and fetches more profit for the product manufacturer.

5. Pricing Optional Products

It is a general approach, if the companies decrease the price of a product or a service, they do increase their price for their other available optional services. Let’s take a straightforward and typical example of a budget airline.

The prices of their airfare are low. However, they will charge you extra if you want to book a window seat; if you want to travel with your family and want to book an entire row together, you might have to end up paying extra charges as per their guidelines, in case you have too much of luggage to carry you will end up paying extra on the same, in fact, you will end up paying extra charges even if you need extra leg space in budget airlines. You can say that even if the price of the airfare is low, you will end up paying more for the extra yet mandatory services that you will require as you travel.

6. Pricing of Captive Products

Captive products have products that complement the products without which the main product is of no use or is useless. For example, an inkjet printer is of no use. Without its cartridge, it will not work and have no value, and a plastic razor will have no value without its blades. Suppose the company is manufacturing an inkjet printer. In that case, it will have to manufacture its cartridges, and if the company is manufacturing a plastic razor, it will have to manufacture blades for the same. For the simple reason that any other company cartridge will not fit into the inkjet printer, and neither will any other company’s blade fit into the plastic razor. The consumer has no other option but to buy complementary products from the same company. This increases the sales and the profit margin of the company anyways.

7. Pricing for Promotions

Promotional pricing is widespread these days. You will find it almost everywhere. Pricing for promoting a product is another very useful and helpful strategy. These promotion offers can include discount offers,  unique gifts  or money  coupons or vouchers , buy one and get one free, etc., to promote new and even existing products. Companies adopt such strategies where they roll out these offers to promote their products. An old strategy, yet it is one of the most successful pricing strategies to date. Its success is because the consumer considers buying the product and service for the offer that the consumer receives.

8. Pricing as Per Geographic Locations

For simple reasons such as geographic location, the companies do vary or change the price of the product. Why does the location of the market affect the price of the product? The reasons can be many, well some are scarcity of the product or the raw material of the product, the shipping cost of the product, taxes differ in a few countries, differences in the currency rate for products, etc.

Let’s take a few pricing strategies examples when a few fruits are not available in a country, they are imported from another country, these fruits are exotic fruits, and they are also scarce, which increases their value in the country they are imported to, scarcity, the shipping cost of the imported product along with its quality rise its price. In contrast, it is much cheaper where it is originally grown.

Similarly, the government implies heavy taxes on a few products such as petrol or petroleum products and alcohol to increase their revenue; hence such products are expensive in a few countries or part of the country compared to the other parts. Geographic location does create a huge impact on the pricing strategy of a product as the company has to consider every aspect before they price a product. Hence the price needs to be perfect and appropriate.

9. Value Pricing a Product

Let me first be clear about what value pricing means, value pricing is reducing the price of a product due to external factors that can affect the sales of the product, for example, competition and recession; value pricing does not mean that the company has added something or increased the value of a product. When the company fears factors such as competition or recession affecting its sales and profits, it considers value pricing.

For example, Mcdonald’s, the famous food chain, has started value meals for their consumer since they have started facing competition with other fast food chains. They offer a meal or a combination of a few products at a lower price where the consumer feels emotionally content and continues to buy their products.

10. Pricing of Premium Products

Well, this strategy works just the other way around. Premium products are priced higher due to their unique  branding  approach. A high price for premium products is an extensive competitive advantage to the manufacturer as their high price assures them that they are safe in the market due to their relatively high price. Companies can charge premium prices for products and services such as precious jewelry, precious stones, luxurious services, cruises, luxurious hotel rooms, business air travel, etc. The higher the cost, the more the product’s value will be amongst that audience.

· Analyzing Competitors

· Competition

· Competitor Pricing Strategy

· Cost of Production

· Demand

· Estimating Costs

· Perceived Value

· Price Benefits Comparison

· Price Objectives

· Pricing Method

Pricing Process

Competition

The first area we want to look at to begin the pricing process is the competition. What are the market leaders charging for this product? What is the product position compared to these leaders? Answers to these together they can help you formulate a price. Remember that your consumers can easily see your competitors pricing efforts, it is important to price with your brand and position in mind. While the competition is a great way to get a frame of reference there are certainly other areas that need to be explored.

Cost of Production

One of these areas to explore is the cost of production. Creating this product must be profitable for the company. With special technology your competition may be able to produce the item for cheaper than you can, so it's important to look at your own production costs. Something to consider when pricing your product is the ability to offer a discount if products are bought in bulk. Is this something you would be willing to pass the savings on for? Bulk discounts certainly make more sense in some industries than in other industries.