The marketing department
The marketing department plays a pivotal role in maintaining the ability of a company to get customers. The department of marketing is formed to maximize the art of gaining customers. For this, there are skill and strategies used by the marketing manager. The marketing manager needs to know the competitor’s price in addition to the known average price of the commodity. The reason why the marketing manager should know the competitor’s price is because the price provides a gauge on the strategy to use in marketing. Also, the competitor’s prices offer information on the amount to use during marketing.
Businesses use various strategies to get their heads up in the market. The choice of a plan depends on the type of market involved. In pricing strategies, businesses tend to manipulate profits over costs. This manipulation of profits involves trying as much as possible to cut down the liquid liabilities and liabilities in general for the intention of maximizing profits. It is also possible to alter the price of commodities aiming to maximize the earnings in pricing strategy. It is the desire for any company that each financial becomes better in terms of making profits. Pricing marketing works best in a monopoly environment. In such a marketing environment, the large businesses shut small struggling ones. Market prices reduce to a level that would not be economically reliable for other companies in the same industry, thus uses a penetration price strategy. In the non-pricing strategy, there is the use of activities that do not involve altering prices that boosts the capability to obtain profits. Such activities entail good craft, quality improvement, better service, and extra service. Non-pricing strategy in competition works in oligopolies and where a market is in imperfect competition. The strategy will produce an impression of a highly competitive market while rivals collude to keep high prices. The strategy also works well in an environment where sellers offer their services as a product. An example is Airbnb. Use of tools such as advertisements is vital in non-pricing strategy.
The petroleum and milk business is exceptional businesses that are interesting to study. In the petroleum business was a monopoly. If it were not for President Roosevelt, all the oil in the world would have been coming from a sole producer named standard oil owned by John Rockefeller. President Roosevelt de-monopolized oil markets for the benefit of ordinary citizens and developing businesses to grow. Truthfully, the president’s idea worked out well. During those days, oil prices were controlled solely by one company. The small companies that tried to enter the business were quickly shut off by a decline in oil prices. This case is an example of a pricing strategy. The customers are kept at bay by the company by the reduced oil prices. Now, there are many companies in the oil sector ExxonMobil, British Petroleum, and Shell being the big contributors. There are also many gas stations all-around a town. For a gas station attract customers, there needs to be a strategy. One of the most common is lowering the price with some cents. Reducing costs will make many customers visit the petrol station. Market penetration strategy is used to achieve pricing marketing.
Pricing is important. There is a diminish in value when a product is overpriced. When underpricing occurs, money gets lost. Proper pricing should, therefore, be precisely done. Firstly it is essential to determine the value of the product in that what is the most a person can pay for a product? Secondly, understand the ratio of percentage impact and business element. Lastly, you can do cost-plus pricing when giving your products a price.