“What should be
the price of my product?” is a question every manufacturer, research and
development team and marketer asks each other. They all want to come to a price
that will not only be too low nor too high. (Please see we are talking general
FMCG goods, and not premium brands like Pringles but something like Lay’s). At
the same time, the price should be such that it provides profit as well as a
competitive advantage.
There are
several pricing strategies companies use, like:
1. Survival – prices are low, covering only the
variable cost and the fixed costs.
2. Maximum
current profit – a
price that would give companies maximum profit in the current situation.
3. Maximum
market share – prices
are kept low to ensure high penetration in the market.
4. Maximum
market skimming –
prices are kept high, so as to attract only select customer.
5. Product
quality leadership –
prices are too high and are meant for only a section of society where brand and
class is important.
6. Other
objectives – A NGO or
government college looking only for partial recovery.
What pricing strategy
does Cornetto use?
Cornetto uses a
maximum market share pricing
strategy. All the flavours under Cornetto are priced between Rs20 to Rs.45 with
a weight of 45ml-125ml. The cheapest one priced at Rs. 20 is a simple chocolate
flavored cone. And, as the flavors improve form exotic to two flavors in one
cone, the price rises and so does the weight.
Because of this
strategy, it is affordable by large masses than just select few. They thus,
have become a popular choice among the kids at school or college. They are just
pocket friendly.
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