`CHAPTER 3 Best Practices of Different Companies on

Pricing Strategy

"you can determine the strength of a business over time by the amount of agony

they go through in raising prices." – warren buffelt

Learning outcomes:

At the end of the chapter, the student is expected to

· Determine and explain different companies use a pricing strategy to attract

more customers and retain loyal consumers;

. Know and understand the ideas on best practices displayed by different

industries and how they respond to the needs and wants of the customers;

. Identify and describe the benefits of using pricing strategies and how they

help the company to meet the expectations both of their internal and external

customers;

. Classify and explain the implication of the pricing strategy to augment the

company's needs in providing timely attractions for customers' awareness and

satisfaction; and

. Elaborate the impact of best practices to the stockholders and stakeholders in

satisfying the customers' needs and wants in the product.

Introduction

This chapter will discuss how different companies will adapt to the pricing

strategy mentioned in the previous chapter. It will enhance readers' ability to

grasp the knowledge in Pricing by identifying the strategy being practice by the

different companies here and abroad.

In using the Absorption Costing and Transparent Pricing, the selected firm

is Bragg Live Foods and Heinz International both exercising the best practices

regarding the operation both in production, pricing, and distribution. The

following are the essential information regarding the two selected distributing

companies: The production and distribution of Apple Cider Vinegar have two

leading companies. The first is the Bragg Live Foods and Heinz International. These
two companies are well-known for their quality product as well as best pricing

strategies making it the top distributor of the Apple Cider Vinegar worldwide.

Bragg Live Foods is mainly centered on the production and distribution of ACV

while the Heinz International sells various food products and condiments. One of

the best Philosophies of Bragg Live Foods is that "Your Health is your Wealth!"

Leaving a great advertising influence to purchase decision tackling about the

nutritional benefits of the product from the very drop of the ACV. While Heinz

optimizes its distribution through its established branding which is famous all

over the world. The price in the Philippines varies among different stores, yet the

price range for the regular apple cider varies within the price range of Php 250-400

depending on the variants. The same goes to Heinz and Bragg, some stores also

added a promo package of an Apple Cider Vinegar together with a Healing Clay

for those customers that are looking for ACV to be used as a facial treatment.

In using Accumulated Production, the cookies found in Nuvali,

Santa Rosa Laguna is expensive compare to other places in the

area. Aside from their bigger sizes, the cookies are very satisfying

because of its taste and quality.

The prices of cookies are affordable in Poblacion, Santa Rosa

Laguna because the cost of production is lower due to the accessibility

of raw materials in the area.

In using, Activity-Based Cost Accounting

PUREGOLD is a company that analyzes it,

competitors, when they tend to feel that their

sales are getting low, they always try to compete

among the other supermarket or same firm they

are with. A price war is mostly a famous way of

dealing with competition. This kind of firm uses it

when they notice that the other gain more profit or sales than them. They offer price

discounts in their market. They also think of a strategy on how they can win over
their competitors and rename it with their company name.

In using, Alliance Pricing Strategy, Apple Pay and MasterCard are one of

those successful companies that use alliance strategy effectively. Apple Pay and

MasterCard are competing with each other. Apple collaborated with the second-

largest credit card provider in the world, MasterCard, to gain credibility in the

merchant services and processing arena. While Apple Pay gets the benefit of

MasterCard's reputation, MasterCard gets the cache of being the first to be an Apple

Pay authorized option. The experience of MasterCard helps Apple as it works out

potential bugs and issues as Apple Pay becomes more prevalent. Those in similar

areas do have the opportunity to benefit from each other. Think about a mortgage

lender and a real estate agent. These are often considered to be power partnerships.

However, there is usually some disparity as one may have more power partners

than another, therefore the relationship is not exclusive. After testing partnerships, a

real estate company might decide to bring a mortgage brokerage as a subsidiary in

building a bigger company with all-inclusive resources.

In using the concept of Analyzing Competitors Costs, Prices, and Offers

Kowloon House pioneered in selling siopao creates a lot of competitors. The taste

and quality offer are not the same compare to their competitors. Some of them tried

to duplicate its taste and appearance. They offered reasonable prices

and good ambiance so that consumers can also be satisfied. While

siopao along the street is not expensive and has a cheaper price that

can attract actual buyers of the product.

In using BPTO (Brand Price Trade-Off), Mango Juice made by Desika Foods

Company used this strategy. The innovation and business expertise in using

mediciné to cure some diseases now can be developed. Some edible plants can be

turned into different kinds of products. And can be used as a new drug or medicine.

In using, Bait and Switch Tactics, Burger King Whopper serves the flame-grilled

patties in their burgers that consumers loved. The Burger King Whopper's false

advertisement rapidly takes over the net when many people noticed that the actual
advertisement of the 'Whopper" does not look the same as what the real product

presents. Another example was Walmart. Year after year, the Walmart heirs prove

no one comes close to their brand of exploitation, which they wrap in public relations

fluff and deception. On January 13, 2018, with much fanfare, Walmart announced it

was raising its minimum starting wage to $11 an hour (from $10) and giving eligible….

workers a $1,000 bonus, tying its munificence to the recent Republican tax cut. They

used bait and switch tactics not to give their employees additional incentive in doing

their jobs but to increase competition with other companies utilizing increasing their

employees' wages and luring more customers to avail their items that are said to be

on "sale" but originally are not.

In using Bonus Pack, Unilever has adopted the strategy of Bonus Pack. The

firm occasionally uses sales promotions, such as discounts and product bundles.

The promotion and price element ensure the company's profitability. Unilever

maintains a good market that addresses competition and other challenges in the

global market. Unilever expands its consumer goods business over the years. Some

customers are interested in discounted price bundled promo at a very affordable

price, whereas another segment is more concerned about the other factors, such as

quality, value, and a very well-known product. Consumer's perception of quality

may be influenced not just by the affordable price but also by such factors as store

reputation and good advertising.

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In using Break-Even Sales, Unilever is a British-Dutch transnational consumer

goods company co-headquartered in London, United Kingdom, and Rotterdam,

Netherlands. Its products include food and beverages, cleaning agents, beauty

products, and personal care products. It is Europe's seventh most valuable company.

This product contains the same intention for all the looks and smells good, which

contain scents that gives freshness to the hair. Both HEAD AND SHOULDERS an

CLEAR MEN offer same amount of selling price. All these two shampoos infuse for

a brilliant clean and fresh hair.

20%

head&

MORE

CLEAR

shoulders

EAR

In calculating Break-Even Sales, the World Balance

WORLD

BALANCE

story began with one pair of shoes and a visionary

family of shoemakers in the 1980s. Now, the brand has grown into one of the leading

retailers in the country. For more than 40 years, World Balance has, and continues

to, make people, products, and lives better. The brand is all about offering a wide

array of quality products and experiences the customers love. Whether it is for

everyday wear, work, or performance, World Balance provides value and comfort

to our customers from different walks of life. CHG Global Inc. is the owner and

distributor of the active-lifestyle brand, World Balance. World Balance has been
one of the country's leading brands of footwear since 1982. It has a wide range of

footwear collection for men, ladies, and children. In many boutique stores in the

leading malls and the leading department stores nationwide. The company also

carries and distributes various local and international brands such as Base London,

East Rock, 7soles, and Easy Soft.

In Broad Price Policy, Apple's success has become a model for the business

world, it attracted much attention of the business community, At the same time

there are a lot of people have started to explore Apple's success and try to learn it.

Base on the research, we understood that the success of Apple has been supported

by a lot of factors, which include Apple's unique creativity, hunger marketing

strategy, Apple's amazing teamwork, etc., but never forget, Apple's pricing

strategy is also important factor.

Apple is persisting in the skimming pricing strategy; this is to set a high price for

the product to grab the maximum profit in the short term as the goal rather than to

get the maximum sales. Focus on the Apple, before each generation of new products

come out, they had already stirred up the consumers' psychology infinite curiosity

and expectations, then when a new product start sale in the market, it's quite a

high price makes a lot of consumers stay away. However, despite its relatively high

price, it has still not reduced its sales, instead, it is more robust the high-end image

of Apple in the minds of consumers, and get a magnificent sale in the market, at

meanwhile bring a lot of loyal customers. However, just at the time the sales are still

running well, and the market has not saturated, Apple has started to develop the

latest generation of products, the old products begin to reduce the price. As a result,

before the latest product is not yet available, the current product has become hot

products, market coverage has reached a considerable height, it opened a broader

market for the advent of new products. In the latest product comes out, their price

is even higher than the previous generation, but its sales are still good. That is why

Apple's skimming pricing strategy can obtain a good result.

There are several reasons why Apple is adopting the skimming pricing strategy.
1. High price = High profit.

Development of new products at higher prices, it can get profit as large as

possible in certain sales, conducive to get a rapid return on the initial investment

of new products and to provide capital to further expand the scale.

2. High price base on the product positioning

Apple's target market is the high-end consumer; thus, this market position

is supported the product pricing.

3. Suppress competitors

The new product priced higher could prevent several new competitors from

entering the market to a certain extent.

4. To meet the psychological needs of consumers

Apple chose this pricing strategy; its most fundamental essence lies in its

consideration of the psychological needs of consumers.

So, Why Apple's pricing strategy can be a success. First, there is a very strong

brand to make support. Secondly, there are several customers with strong purchasing

power and not sensitive to price. Moreover, the amazing speed of replacement of the

new products in the whole industry.

To sum up, a good product pricing will not only

help to improve sales revenue but also help enterprises

to establish a good relationship with customers,

however, to develop a good product pricing is very

difficult, if the companies make the slightest mistake,

the improper pricing phenomenon might occur.

(Apple Skimming Pricing Strategy. (2016). WordPress. Retrieved January 10, 2020, from:

https://mpk732t12016clusterb.wordpress.com/2016/05/01/apple-skimming- pricing-strategy/)

Sony has released the price of the new PlayStation 4 to

be $399, looking at the price of the new PlayStation and

comparing it to the ultimate competitor Microsoft and their

Xbox one is $499, Sony is planning to increase its market

share by at least 10%.

Sony market-based pricing is grounded on price skimming, this is the most seen

with new and innovative products, such as mobile phones and game consoles. Tho

price is set high initially to gain those customers who will pay almost any price to have

the latest gadgets in their hands, once the business has profited from selling to those

customers. It drops the price to tempt other customers who may have been put off by

the high price originally. Sony is only able to do this because it is likely to be almost

no competition in this market due to the cutting-edge nature of the product, this can

be related to the play station 2 where it's being sold at a very cheap price of $80 from

an original price of $250. Moreover, Sony and Microsoft use psychological pricing.

where they set prices at just under the currency unit, such as $399 rather than $400

this is based on different reasons such as $399 appears that it is offered at the lowest

possible cost rather than being priced up to the nearest full currency unit. Moreover

psychological pricing pushes products into cheaper price bands

(Marketing: Sony and their Price Skimming Strategy. (2014). Blogs. Retrieved

January 10, 2020, from https://blogs.ubc.ca/khalilwazir/2014/10/25/sony-and-their-

price-skimming-strategy/)

In calculating Break-even For New Product, one of the companies that also uses

Calculating Break-even is Nike. Last year I went to their store, then I see some of

their products is a 10 to 20 percent discount. Nike's cost leadership generic strategy

sustains a competitive advantage based on cost. The company minimizes production

costs to maximize profitability or reduce selling prices. In the late 1990's, Nike reduced

costs and the selling prices of its athletic shoes and other products. Nike markets its

products under its brand, as well as Nike Golf, Nike Pro, Nike+, Air Jordan, Nike

Blazers, Air Force 1, Nike Dunk, Air Max, Foam Site, Nike Skateboarding, Nike CR7,

and subsidiaries including Brand Jordan, Hurley International, and Converse.

In using Captive Product Pricing is when the value of the main product is very

low, but the value of the supporting product, which is necessary for the working of

the main product is high. My example for this is a company of EPSON printer, every
time when buying a printer, there is a need for an ink. Retailers use several different

strategies to come up with their prices such as a combination of them (printer and ink).

One of the strategies that they use is captive product pricing. This specific pricing

strategy involves a retailer selling a base product for an inexpensive price or even

giving it away for free. However, additional products are required to receive the full

benefit of the item received. The company loses a bit of money on the base product,

but they make enough of a product on the additional items to make up the difference.

The captive products are the additional items that the consumer purchases.

Another example is the Gillette Company is the world leader in the men's grooming

product category as well as in certain women's grooming products. The Gillette

Company is a globally focused consumer products marketer that seeks competitive

advantage in quality, value-added personal care, and personal use products. Gillette

Company is one of the perfect examples for captive product pricing, their product razors

serve as the core product while the blades are the captive product. The consumers of

this product must always buy another set of blades after they used the old blades. They

are obliged to buy blades because the razor will not function without the blades this is

the time where the consumers have to spend a lot of money were in the Razor Mach

3 or Mach 4 cost almost equivalent to the captive items. The razor might be bought

once a year, but the blades have to be bought every quarter at the least. Canon Inc. is

Japanese multinational corporation specializing in the manufacture of imaging and

optical products, including cameras, camcorders, photocopiers, steppers, computer

printers, and medical equipment. The Canon printer is another example of applying

the captive product pricing. The printer is the core product, and the ink cartridge

is the captive product. Without the ink cartridge, the printer does not function. In

this situation, the consumers will be forced or obliged to

buy ink cartridge after they consumed it because they

cannot use their printer without the ink cartridge. The ink

cartridge is more expensive than the printer.

Lenovo Group Limited, often shortened to Lenovo,

is a Chinese multinational technology company

with headquarters in Beijing. It designs, develops,

manufactures, and sells personal computers, tablet

computers, smartphones,

workstations, servers,

electronic storage devices, IT management software,

and smart television.

Lenovo laptop is another example of captive product pricing because the laptop

itself is the core product and the software in the laptop is the captive product where

the consumers of laptops must upgrade their outdated software. This is where the

software is more expensive than the laptop itself.

In using Channel Pricing, PJM Consulting company is a firm that Pricing software

products. "Phil Morettini", the President of PJM Consulting Company stated that

"Pricing software. With high product product is always a difficult exercise development

costs, but very low costs of goods sold, there are many different strategies that people

have followed successfully and not successfully over time." He also stated that

"Pricing hardware products is a bit simpler because there generally significant cost of

goods sold that act at least somewhat as a governor in market pricing behavior". But

even with hardware, technology markets are dynamic and fast-moving. Pricing is a

complex enough topic when all sales are going direct- one it brings channels into the

picture, it only gets worse, today, we'll focus on channel strategy.

In using Clearance Markdowns for Fashion Merchandise, markdowns are

fervently used in the business industry, in this case, the fashion industry specifically.

Here are those firms that also use this strategy:

The second firm example is Penshoppe, which used a

combination of pricing strategies such as markdown and

psychological pricing strategy. An example of this is a shirt that

was originally at three hundred ninety-nine pesos then when it

was marked down it became two hundred seventy-nine pesos

SALE

SALE

only, the percentage range is almost thirty percent of the apparel's

original price. This markdown strategy is effective for brands as

Striped Top

₽309.00 F279,00

Cropped Top

P300.00 ⑈279.09

big as Penshoppe since this firm usually sells its product at a high price, customer

easily get attracted with a percentage markdown pricing strategy.

BENCH

The first firm that makes use of such a strategy is Bench stores; this firm usea

percentage sales on their clothing apparel, intimate wears, clothing garments, and

fashion merchandises. It can be seen on the pictures below that they utilize th

percentage markdown strategy. From a seven hundred ninety-nine and seventy-five

cents, a sheer top became three hundred ninety-nine pesos only. The item was cut to

a fifty percent mark downrange from the apparel's original price. As big and mass

produced firms like Bench. It is an effective and efficient way to gain customers

since branded clothing is usually expensive; markdown prices make an item more

reachable for almost every working person with different income ranges.

SALE

SALE

Striped Short Sleeve Top

Sheer Top

Round Neck Tee

P199.00 P69975

F399 00 1790.75

199.00 144925

In using Competition-Based Price Strategy, Phoenix Petroleum Corp. and

Chevron Philippines (Caltex). Their fuels are the fastest-growing and leading

independent oil company in the Philippines while Chevron Philippines (Caltex) is a

petroleum brand name of Chevron Corporation used in more than 60 countries in the

Asia-Pacific region, the Middle East and Southern Africa. Both Phoenix Petroleum

and Chevron Philippines used Competition-based Price Strategy.

PHOENIX

CALTEX

Phoenix Petroleum is one of the fastest-growing oil companies in the Philippines.

In 2018 it acquired a market share of 6.91%, putting it within striking distance of the

"Big 3" oil companies. The company was founded in 2002 by entrepreneur Dennis

Uy with its headquarters located in Davao City. On July 11, 2007, Phoenix Petroleum

listed on the Philippine Stock Exchange, becomes the first oil company to do so since

the passage of the Oil Deregulation Law in 1998. The company grew from 1 to 300

service stations in its first ten years. Phoenix Petroleum also acquired a 60-hectare

industrial park in Batangas which later came to be known as Phoenix Petroterminals

od Industrial Park. This location services as the company's largest terminal. Their

drel products include Phoenix PULSE Technology and they have a wide selection

lubricants and oils, including Phoenix Accelerate Fully Synthetic oil, Phoenix

ccelerate Monograde, and Phoneix Accelerate Multi-grade. Chevron Philippines

the third-biggest oil company in the Philippines with a 2018 market share of

-86%. Chevron markets Caltex fuels, lubricants, and other petroleum products. The

ompany has almost 700 service stations nationwide and 20 major supply facilities

including their main supply hub which is located at their terminal in San Pascual,

Batangas. Chevron also provides fuel jet fuel for several airlines at Ninoy Aquino

International Airport and Mactan Cebu International Airport. Their fuel products

include Caltex with Techron gasoline, Caltex Diesel with Techron D, kerosene,

lubricants, and fuel additives. They also have a full range of lubricants including

Havoline engine lubricants and coolants for passenger cars and motorcycles. Techron

Concentrate Plus fuel additives and Delo diesel engine oils.

In using Competition-Based Pricing, Coca-Cola is the brand with the highest

brand equity. No doubt it has gone through the ups and downs of business to reach

that position. The marketing mix of Coca-Cola has been changing over time with

more and more products being added such as today it has more than 3000 products.

The company has the widest portfolio in the beverage industry comprising of 3300

products. Beverages are divided into diet category, 100% fruit juices, fruit drinks,

water, energy drinks, tea, and coffee, etc. As per Neilson's data, Coca-Cola in the

no.1 brand retail packaged water in 2010. Coca-Cola has its market presence around

200 countries. Coca-Cola brands in India are Fanta, Maaza, lime, Sprite, Thumps up,

Minute Maid, Nimbu fresh, Nested iced tea, etc. Due to the availability of a wide range

of products, the pricing is done according to the market and geographic segment.

Each sub-brand of coca-cola has a different pricing strategy. Their strategy is based on

the competitor's pricing; Pepsi is one of the most competitors to coke. The beverage

market is said to be an oligopoly market means few sellers, large buyers. They form

into a cartel contract to ensure a mutual balance in pricing between the sellers. When

one price a product as per the competition, then it is known as competitive pricing.

Important criteria in customer purchasing behavior are the price. Companies generally

set the price by taking into consideration competition, cost, and price sensitivity. To

result in profitable and sustainable business, managers have to set price so it covers

the cost of production, cost of company overheads, and provides suitable profits.

(Bhasin, H. (2019). Marketing Mix of Coca-cola- Coca Cola Marketing Mix. Retrieved

from https://www.marketing91.com/marketing-mix-coca-cola/)

In using Complementary Pricing Strategy, Gillette is one of the examples of the

Complementary Pricing. Gillette made its main shaver's price as low as possible

and made its complementary product which is the blade high to cover up the profit.

One of the characteristics of Complementary Pricing Strategy is the added profit

from the two different product that compliments each other Colgate-Palmolive first

introduces their toothpaste after the toothbrush. Colgate toothpaste got the attention

of the people because most dentists recommend it then that's the time where they
also produced the complementary product which is the toothbrush. Microsoft is

another example of a company that has used this strategy to its product Xbox and

Its games. They have increased their sales since the time they have released their

first game Halo: Combat Evolved. Since then, they continuously released different

games to provide the demands of their market.

COLGATE-PALMOLIVE

In using Cost-Based Pricing Strategy, the pricing strategy of small businesses can

ultimately determine fate. Small business owners can ensure profitability and longevity

by paying close attention to their pricing strategy. Small businesses tend to use a

cost-based pricing strategy more than bigger businesses. Sari-Sari stores are a perfect

example of it. These kinds of stores are home-based businesses so they do not need

additional expenses for labor and other expenditures more than their initial capital.

The decision in manufacturing companies is primarily influenced by accounting

data, to get a certain return on investment or a certain markup costs. It uses the

manufacturing costs of the product as its basis of coming to the final selling price of

the product-either a fixed amount or a percentage of the total product manufacturing

cost is added as profit to the cost of the product to arrive at its selling price. Using

the cost-based pricing strategy can give manufacturing companies some advantages

because cost-based pricing strategy is a simple and straightforward strategy, it

also ensures that all production and overhead costs are covered before profits are

calculated and lastly, it also allows the manufacturer to consider how various levels

of output can affect the product price. Also, the manufacturer can examine how

various prices will affect the amount of output needed.

In using Cost-Based Pricing, Retailer Everlane uses cost-plus pricing to make its

value proposition of "radical transparency" come alive. For every garment it sells

Everlane provides a detailed breakdown of costs for materials, labor, duties, and

transport, along with its markup. This way, customers can easily verify Everlane's

emphasis on paying fair wages to workers manufacturing its garments and actively

endorse this company value by buying its products.

Costco uses a final and significant virtue of cost-plus pricing

that lies in executing a "Cost leadership strategy". The company

has unique competencies that allow for an advantageous cost

structure relative to competitors, uses cost-plus pricing to create

and deliver the most enticing value proposition of all. It becomes

a cost leader, and its low costs, the resultant low prices, and superior customer value

become an integral part of its brand identity.

Costco has maintained market leadership for decades by using this principle. The

company mandates that nothing in its stores will be marked up by more than 14%

15% for its private-label products). It widely publicizes this pricing policy. When

oupled with other cues such as a Spartan store environment, limited assortments,

end bulk buying, its cost-plus pricing creates a powerful image that the customer is

going to get great deals at Costco.

Dholakia, U. M. (2018). When Cost-Plus Pricing Is a Good Idea. Retrieved from

https://hbr.org/2018/07/when-cost-plus-pricing-is-a-good-idea.)

1. P&G and Unilever

In using cost advantage, HUL & P&G dominate the FMCG

P&G

market due to one reason -Economies of scale. These companies

are very large and have a massive presence which results in

them having lower costs. Lower costs of transportation and

distribution due to multiple products being distributed to the

same retailer. Similarly low costs of raw material because they buy and product in

huge bulks. Due to the economies of scale and therefore the cost advantage, these

two companies are ruling in the FMCG market.

2. Amazon

Amazon has adopted the ed many different technological

methods to reduce cost. It has started using robots for its warehousing

purpose. This means higher work times at lower costs. Similarly, amazon
they are coming up with various AI an algorithm which is helping

the company with automation, thereby reducing costs.

3. Airlines

Another industry that is focused on cost is the Airline

industry. Across the globe, the brands winning major

market share domestically are brands that have reduced

their airline costs and hence are giving better prices to

customers. Such airlines are winning from the bigwigs of

the industry which have a lot of bloat in their infrastructure.

In using Cost Leadership involves gaining a competitive advantage by lowering

the cost. Cost leadership is the main generic strategy that Tesco uses in various

consumer markets.

Rebisco

Clumbia

SINCE 1937

TESCO

How Tesco use a cost leadership strategy?

1. The primary objective of using this strategy is to preserve the market leadership

position through efficient value chain management.

2. This strategy allows Tesco to expand the market share by targeting the middle

class, which makes the largest proportion of the overall consumer market mix in

most of the countries. Middle-class consumers generally place high importance

on the pricing factor and cost leadership is the best strategy to cater to the needs

of this consumer segment.

3. Tesco focuses on affordability and easy accessibility of its products across the

globe, which leads towards high brand awareness and high sales growth and

provides a strong competitive advantage basis

4. Other than charging low prices by lowering production cost and maximizing

supply chain efficiency, Tesco frequently offers discounts and coupons to

achieve sales targets and handle the competitive pressure by its closest rival.

The intended outcome of these discount and promotional campaigns is to

increase brand popularity and encourage consumption.

The discussion of Tesco's cost leadership strategy has outlined many benefits

offered by this generic strategy, such as-gaining quick brand recognition, expanding

the customer base, encouraging consumption, and achieving sales targets by

emphasizing product's affordability and accessibility. Although, the analysis of

Tesco Tesco's competitive advantage strategies highlight cost leadership as the

main strategy, the company also uses the differentiation strategy along with cost

leadership to set the basis for sustainable competitive advantage in the intensely

competitive global consumer market.

In using Customary Pricing, the Columbia's and Rebisco Candies are the pioneers

and one of the most popular candy makers in the Philippines. They sell their products

per bundle for about P20 to P30 inside of a bundle it contains 20 to 35 pieces of lollipops.

Commonly in the Philippines, there is a Sari-Sari store that sells those lollipops per

piece for a P1.00, over the years this price has a little margin of increase or didn't

even increase at all. Even though the price of the sugar increases they still maintain

the product's price to what customers expect. Sometimes they reduce the size of the

candies, reduce the pieces of lollipops inside the bundle, or use an alternative to sugar

as a sweetener to maintain the price point.

Company Strategy - The companies use the same techniques in minimizing

the production cost of their product. First, if the price of sugar increases they use

an alternative to their certain ingredient such as glucose-fructose syrup (GFS), and

high fructose corn syrup (HFCS) to maintain the production cost. Second, if the

price of other ingredients of the product increases they tend to reduce the size of

their products to maintain the production cost.

In using Customer Perceived Value Pricing,

My Lady Milk Tea is a well-known brand in the field of milk tea made landmark

achievements and inspired by Korean Milk Tea. My Lady Milk Tea & Coffee Shop
has many variants and delicious flavors of milk tea that can

satisfy your cravings. A trending iced drink made from tea,

different kinds of flavorings, and small black balls of boiled

tapioca, usually served sweetened and mixed with milk.

These are the ways they are doing the practices of selecting

of pricing method is that every money of customer is paid

for their products and services has a very good quality and

feeling of worth it, not only because of the taste of their milk

tea is delicious but customers also feel satisfied by their nice and welcoming way to

treat and greet their customers. Their place is comfortable, clean and the ambiance

is fantastic. .

this milk tea is commendable by many milk tea lovers. They select the pricing

method in terms of this company's core values. It helps in building the character of

their employees. Their friendly staff interacts with customers on a personal level-

always with a smile, respect for others, and a welcoming attitude. They went through

operational training and procedure supervision which assures exceptional customer

service. They satisfy taste buds through its variety of unique, refreshing, and fresh-

brewed drinks that will surely be remembered by the customers and make them

come back for more especially this product is originated here in the Philippines.

Since this topic focuses on selecting of pricing method, Milk tea in these two milk

tea shops to be the product, It is one of the best-selling drinks nowadays especially

for the teenagers or even the adults and kids who love the sweet taste or to satisfy

their cravings. Many companies are competing in the following areas: taste, quality,

flavors, and even the ambiance.

In using Customer Segment Pricing, Sbarro's NYC one of the

most expensive pizzeria stores. The mentioned pizzeria is well

known for its benchmark and originally crafted seven flavors of

pizzas at different low to lavish prices.

To expound the pricing scheme of this shop, the bought a slice of New York
Cheese Pizza at the price of P99.00 and New York Sausage Pizza at ₱145.00, both

these are slices. But lately, in the year 2015, the Sbarro's resurrected their ₱49.00 slice

of pizza which nowadays are always sold out.

In using Customer Value-Based Pricing, Starbucks is the master of employing

value-based pricing to maximize profits, and they use research and customer

analysis to formulate targeted price increases that capture the greatest amount

consumers who are willing to pay without driving them off. Profit maximization

is the process by which a company determines the price and product output level

that generates the most profit. While that may seem obvious to anyone involved in

running a business, it's rare to see companies using a value-based pricing approach

to effectively uncover the maximum amount a customer base is willing to spend on

their products. As such, let's take a look at how Starbucks introduces price hikes and

see how it can use its approach to generate higher profits.

In using Dealing with Perception of Fairness, there is a principle called 'Dual

Entitlement' where there is fairness if sellers pursue a pricing rule of raising prices

when their costs increase, but not reduce their prices when costs decrease. Also.

this principle effectively implies that suppliers are allowed to increase their profits

when there are cost reductions. The buyer is only entitled to the current reference

price and not to a share of the cost savings in the form of a lower price. If businesses

use this kind of pricing strategy, it is somewhat unfair for the consumers who are

just paying higher prices for the product they need or want.

When it comes to dealing with the perception of fairness, sellers found either in

a wet or dry markets (palengke in Filipino language) are the best example. They are

offering products such as seafood, meats, frozen goods, vegetables, and fruits. They

can increase prices easily because of high demands and decrease in supply.

In using Deceptive Reference Pricing, the following are the original order of the

evaporated milk from its prices: first, Alpine Full Cream Evaporated (₱57.00); second,

Alaska Evaporated (₱40.50); third, Carnation Evap Creamer (P37.50); fourth, Alaska

Evaporada (P26.00); fifth, Jersey Culinary Milk Evaporated (P22.00); and sixth, Angel
Evaporada (P21.00). The Carnation Evap Creamer and Alaska Evaporada is the only

one that has "50 cents" and the rest is in the whole price. The thing is it is the strategy

of Carnation Brand as its significance to the rest of the evaporated milk. The Alpine

Full Cream Evaporated is the reference price of the consumer in buying evaporated

milk but when the sales price is there the consumer focus on the price down of the

regular price and grabs the chance to purchase a lot and neglects the other brand.

Angel Evaporada has the same height as another brand with 370ml that a buyer might

not notice that it is only 365ml and think of it as the cheapest brand with the same

amount compared to other brands.

Alaska Evaporated and Angel Evaporada seems to be competitive at the pricing

set since Alaska Evaporated is sold for 2 pcs at its selling price is P76.00 whereas

Angel Evaporada is sold for 3pcs with the amount of ₱68.00.

At first look you can save a lot buying three pieces compare to the sales tag

besides it and in the computation of its discount; you can save more and have more

when you choose Alaska Evaporada's promo. As I noticed there is no word in the

middle of the two tags indicating "compare at" but automatically once a consumer

looks at it, what comes out of his/her mindsets a reference price which is the higher

one. As a result, there will be a lot more demand for the lower price and with a

high margin. Without thinking of that if the consumer bought Jersey Culinary Milk

Evaporated that only cost P22.00 each as its original price for three pieces it can be

purchased for only P66.00. The idea in which they seem to get easily attracted to

see sale prices and makes them think of the sale as sale and no longer deeply think

how much they will really save compared to other existing products that have lower

prices and also offer high margin.

In using Demand-Based Price Strategy, there are several examples of demand-

based pricing that can be seen in a variety of products, companies, and industries.

Disney

Walt Disney World in Florida and Disneyland in

California, which now increases their ticket prices during

holidays and certain weekends, in contrast to times

when there is less demand. In the U.S., other theme park

operators have also embraced this type of pricing such as

Universal Studios. Besides, demand-based pricing is also

utilized in the lodging, airline, and restaurant industries. LOS ANGELES, for the

first time, tickets to Walt Disney World in Florida and Disneyland in California will

cost more during holidays and some weekends, up to 20 percent more than during

slower periods, as the bursting-at-the-seams parks seek to spread out demand. The

Walt Disney Company unveiled its long-expected move to demand-based pricing in

a blog post on Saturday. The seasonal changes, which take effect on Sunday, affect

the two-theme park resorts differently and apply only to single-day tickets and not

the multiday packages that most vacationing families buy, particularly at Disney

World. At Disneyland, located in Anaheim, Calif., which attracts roughly 17 million

visitors annually, single-day tickets now cost $99. Starting on Sunday, the park will

charge three different prices based on the calendar. "Value" tickets, for Mondays

through Thursdays during weeks when most schools are in session, will drop to

$95. "Regular" tickets (most weekends and many summertime weeks) will climb

to $105. "Peak" tickets (most of December, spring break weeks, July weekends) will

cost $119. At Disney World in Orlando, Fla., which includes four major theme parks,

the price changes are more complex, because they vary by park. At the most popular

Disney World park, the Magic Kingdom, which handles nearly 20 million visitors

annually, single-day prices will remain at the current level, $105, for value periods.

Prices will rise to $110 for regular periods, and to $124 for the peak.

Disney tends to increase ticket prices once a year

recently, at well above the rate of inflation and it always

prompts a degree of consumer outrage. But in purely

economic terms, Disney's price increases have been

modest considering the soaring demand, analysts say.

During the company's last financial quarter, which ended

on January 2, domestic park attendance rose 10 percent

from a year earlier, setting records. Attendance in the final quarter of 2014 rose 7

percent from the same period in 2013. Overcrowding during holidays, particularly at

the Magic Kingdom, has become enough of a problem endless lines for rides do not

make for "the Happiest Place on Earth" that Disney had little choice in moving to a

demand-based ticket-pricing structure, analysts say. "In addition to expanding our

parks, we are adopting seasonal pricing on our one-day ticket to help better spread

visitation throughout the year," a statement from the company said. "Multiday

tickets, annual passes, and visiting during nonpeak periods also provide our guests

with options and savings." A Disney spokeswoman declined to comment beyond

the statement. Demand-based pricing, which is commonly used in the lodging and

airline industries, has already been adopted by other theme park operators in the

United States, including Universal Studios, which will unveil a major Harry Potter-

themed expansion of its Los Angeles park next month. Movie theaters and sports

teams are also experimenting with similar pricing efforts.

In using Demand Differential Pricing Strategy

1. IMAX THEATRE

IMAX

THEATRE

IMAX is a proprietary system of high - resolution cameras, film formats, film

projectors, and theaters known for having very large screens with a tall aspect

ratio and steep stadium seating. Differential pricing is often a good fit with more

intangible, service-oriented solutions where customers place different values on

the merits of the service. "IMAX THEATRE" can differentiate pricing by charging

full price to moviegoers who are willing to pay that amount. They can still offer

incentives to more price-sensitive customers through the use of coupons, advanced

ticket promotions, and other types of discounts for certain types of customers.

2. Philippine Airlines

PHP 399
Philippine Airlines

05689

Philippine Airlines is the flag carrier of the Philippines, the airline is the first

and oldest commercial airline in Asia operating under its original name. The airline

industry is one of the most notorious for differential pricing strategies. Philippine

Airlines commonly schedule flights with a premium ticket price. As time goes by,

they gradually reduce the price point to attract more discerning customers to fill the

plane. The nature of differential pricing is such that it benefits companies that can only

benefit by adding volume. Airlines make no money off of empty seats and it costs

them very little extra to sell one more ticket, even at a reduced price.

3. Cabalen and the Enchanted Kingdom

Cabalen is a famous Philippine buffet restaurant chain primarily serving traditiona

Filipino entrees heavy on influences from the Pampanga region of Central Luzon,

ranging from Filipino, Thai, and even Japanese Cuisine. The Enchanted Kingdom is a

famous theme park in the Philippines. It is located in Santa Rosa Laguna.

Holiday

Cabalen

Rates

Eat All you Can. Eat All You Want

Both Cabalen and Enchanted Kingdom offer discounts both for senior citizens

and children under a certain age. Buffet-style restaurants and Amusement parks

attract families and older customers with these discounts and feel comfortable at a

lower price point because seniors and children are likely to consume less food than

those in the age ranges in between.

In using Diagnostic Perception Pricing, since diagnostic perception pricing has no

firms related though, there's a business that is likely to practice this pricing strategy.

Printing Shop

PRINTING SERVICES

TARPAUIN
PRINT

TTERHE

POSTERS

XEROX

BROCHURES

GRAPH

DIGITAL PRINTING

HOUSE

CUT OUT 6HCKER

SLICKERS

WALL MURALS!

VAN WRAP

BUSINESS GARDS

Printing has become a lot more accessible to the general public in recent years,

with printing even possible directly from some modern smartphones. While home

printing may be adequate for personal use, it is a different ball game for people

using printing services to market their business. Businesses will always require

quality printing products, as well as the expertise and advice that they can expect

with doing business with a professional print company.

It has been suggested that the way tickets or invitations look might very well

play a part in whether or not a person buys them. A unique and dramatic looking

invitation will get the attention of those who receive them. This is especially important

if it is an invitation to a charity fundraiser. Attractive printing products always grab

attention, which bodes well for a company, and this is particularly the case with

business publications and business cards. Cards printed on a quality paper creates

good impression on those who receive them, whereas self-printed cards can often look

cheap and unprofessional, and make people wonder about the quality of the products

and services they will receive from the company.

A quality printed flyer will also help to attract more customers, and a professional
printing company can advise on every aspect of the flyers, including design, typeface,

illustrations, the color of type, type of paper best used, and even the color of the

paper. A business will not get the same type of professional advice by looking at

various websites for information.

The concept of Print house grew out of a timeless love to carry one's uniqueness

with which it reflects the dedication to preservation and detail. The ink that delivers

the ideas; the thoughts; the dreams into a magnificent showcase of artistic delight!

and take you one more step towards success. They are the pioneers in large scale

UV printing on any flat surface and customized laser cut models. It will take to the

new era of digital printing by keeping glued to the vision and yet spreading wings

of magic to take place. Capture the tune in the air, the freshness of a breath that

intertwines with hopes and fills in all dimensions around into an aspiring rhythm.

In using Differential Pricing Strategy, the best example is the VIP treatment in

the skies flying extra comfortably - The PAL Business Class and Premium Economy

Special Offer is here to make booking experience even better. The country's only

4-star airline has great deals coming way, providing premium comfort at great fares,

all yours beginning this month. Get the same heartfelt service straight from seats

worthy of trips. That's the signature Philippine Airlines experience: warm smiles,

delectable in-flight meals, and a dedicated crew. And the same Business and Premium

Economy perks remain, of course: (1) priority boarding, allowing to skip lines when

checking in and getting on the plane; (2) increased baggage allowance, giving more

space for things need and things bring home; (3) more room to move, complete with

spacious premium seats and built-in rests for the legs and feet; (4) better dining,

all with metal cutlery and deliciously satisfying meals; (5) added entertainment,

showing a wider view of fun with personal my PAL eSuite screens and access to

speedy myPAL Wi-Fi connections; (6) and extra amenities under Business Class:

Mabuhay Lounge access, full-flat beds, a plush duvet for long-haul flights, the all-

new Furla Amenity Kit, and a dine-at-your-leisure gourmet meal service.

MANILA TO BANGKOK
BUSINESS CLASS

PREMIUM ECONOMY

$499

$ 31

BUSINESS CLASS

MANILA TO SAPPORO

HOLIDAY

$1109

PREMIUM ECONOMY

50% OFF!

BUSINESS CLASS

MANILA TO MELBOURNE

'$ 175

PREMIUM ECONOMY

$ 719

In using Dynamic Pricing Strategy, it can

2$269.0

Blackpink

be seen in the airline industry. The airline

IS104.00

industries use advanced computerized systems

so that they can alter the prices of the tickets

frequently. Adopted along a wide continuum,

this dynamic pricing ranges from constant to

Standing Room

infrequent alterations. These airline industries

alter the prices depending upon several factors

like the viability of the seats, several type of

the seats, and also the duration of time before

Sunday May 05, 2019 @8:00 pm

which the flight departs. Thus for a single seat

in flight, there can be several different prices

possible based on demand.

Another example that can be seen is in the field of music concert businesses.

Some of the major players in this field use dynamic pricing to increase the sales of

the concert tickets. They keep the prices low initially and then raise the prices as the

concert dates come near. Now if the prices are kept low throughout, then the seller

does not get any profit. So when there is a fluctuation in the demand, the seller can

benefit by reducing the prices as the demand decreases and increasing the prices

once the demand starts to increase.

Car drivers know the dynamic pricing of fuel. Fuel

prices change multiple times a day at the gas station,

sometimes even while filling up! This is just one clear

example of dynamic pricing, a tool as old as commerce

itself. Gasoline prices tend to increase when the av of

gasoline decreases relative to real or expected gasoline

demand or consumption. Even when crude oil prices are stable, gasoline prices

fluctuate because of seasonal changes in demand and gasoline specifications.

In using Escalator Clauses, Air Asia operates with the strategy of escalation

clauses or also called escalator clauses. There is a competition between the other

airlines when it comes to their pricing strategy, bidding happens when airline

companies wanting to meet the wants and needs of their customers. Even if it is too

expensive, the demand for the service that they provide is too high that customers

will have no power to choose but to avail the service rather than not on taking the

service of the airline company. It is a long-term contract and also because inflation

happens anytime the change in their respective market price will also change but

there will be no changes in the perspective of the customer. For there will be no other

convenient way to travel that is why the market will still patronize it.
In using Estimated Future Cost Method, there are many firms that use the

same pricing strategy such as Abercrombie, Hollister, and Denim 1987. These firms

also based their price depends on how famous their brand is. For example, the

Abercrombie brand is quite famous due to its casual designs of jackets and it uses

soft fabric to its product that is why it will cost to buy one from them. Shortly, their

cost would vary along with time. This firm needs to maintain its reputation when

it comes to selling jacket apparel for them to stay in business. The main strategy of

these firms is making only limited designs of their apparel and making an impact

on the customers making it a unique kind of jacket. The price varies on the quality

of the product as well as its design. If it is more fashionable and it is still in style

and of the trend, it will surely cost more. Even if the product is outdated but still

in great condition it can cost more in the future. This strategy helps these firms to

manipulate the prices of their apparel to maintain the cycle of their business.

In using Estimating Demand Curve, the Teacup milk tea was one of good milk tea

shops. Their products have good quality, a good ambiance that is why the customer

always come back to their store. The manager of the shop always ensures that the

foods offered are good. In terms of demand curves, they always check or calculate the

demand for goods based on their sales.

In using Everyday Low Pricing, many people choose to buy shawarma shack

because they offer a lower price than the other brand with the same quality of taste.

In every store of shawarma shack, they have their poster that stated Buy 1 Take 1 that

attracts the attention of a lot of people, they offer to buy 1 take one everyday day and

for me, that is a very good strategy. And also they choose one of the famous local

artists as their endorser. Celebrity endorsements also play an important role when it

comes to influencing brand preference. According to marketing studies have reported

that famous people increase awareness of a company's advertising and create positive

feelings towards brands. This observation makes me realize that business to be

successful, you need to choose the best strategy and focus on how to attract markets

or consumers because the most existence of a business depends on customers.

In using Experience Curve Pricing and Product Line Pricing, Matsushita Electric

Industrial Company was in the race to develop a commercially viable videocassette

recorder in the 1970s. It got its VHS format accepted as the world standard and

reaped enormous experience curve based cost economies. This cost advantage

constituted a formidable entry barrier to new competitors. Matsushita's strategy was

to build global volume as rapidly as possible. To ensure that it could accommodate

worldwide demand, the firm increased its production capacity 33 fold from 205,000

units in 1977 to 6.8 million units by 1984. By serving the world market from a single

location in Japan. They realized considerable experience curve advantages.

In using, Fight Strategy, Amazon and Walmart are using the price war strategy to

gain a large market by attracting customers with penetrating the price of competitors.

Because these two retailers have the same concept when it comes to pricing strategy.

These two world's largest retailers believe that "Lowering the price or giving a

discount" to their products might get a lot of sales and leads to a large of market

growth. Both believe that price is the one that matters most onto their target markets.

Due to the strategy, these two are having difficulties getting their profit margin.

Walmart is the world's largest retailer. It has introduced a program to temporarily

lower the price consumers pay for some items on its marketplace site Walmart's

new strategy, dubbed the Competitive Price Adjustment program, will be applied

to "selected sellers and selected items only," according to the description. Sellers

cannot request to be included. 'Buy Box' Walmart's pricing plan mirrors past

Amazon efforts. A plan called "Discount Provided by Amazon," allowed the Seattle-

based company to cut prices of third-party products for a limited time, then pay

the seller the difference between the discounted and listed price. Participating in

such programs helps ensure that vendors get the most prominent positioning on

Amazon's site, known in e-commerce circles as "winning the buy box."

amazon

Walmart

Recently, Amazon introduced "Sold by Amazon," a system where sellers give

Amazon permission to slash the price of their products at will in exchange for a

guaranteed payout to help protect their profit margins. Amazon has also made it

easier to buy single, inexpensive items-like a stick of deodorant-without having

to pair it with other items to meet a minimum order threshold. Walmart and Amazon

have both rolled out next-day shipping on many items, hoping that the added

convenience will lure shoppers and offset the strain it places on their supply chains.

(Boyle M. (2019) Walmart vs Amazon price war. Retrieved from: https://www.

bloomberg.com/news/articles/2019-10-14/walmart-subsidizing-some-vendors-in-

online-price-war-with-amazon)

In using Fixed Pricing, Lomi is a noodle dish that is popular

in the Batangas area. It has thick noodles in a thick soup base.

Its flavor is further enhanced by crushed chicharon and served

usually with pork and egg toppings garnished with spring

onions and garlic bits. Ariel's Lomi Haus offers P40, ₱50, and

P60 serving for their lomi. The pricing strategy that they are using are they always

lowering the price, unlike other lomi business, they are competing to the other

branches but this business will lead you to the satisfaction in the affordable price that

the simple pricing strategy they have. The best practices of the business are having a

good service and a relaxing ambiance.

In using Flexible Pricing, the Philippine Basketball

Gillefte

Association uses the flexible pricing strategy. The factors

to consider in making their final prices are the date of

WEEKDANS

WTEKEND

the game, depending on where the basketball court is,

Premium Bench

VIP

h p 2 900.00
P 2,900.00

opponents, and in major events of the game. The first

Premium Box

P850.00

P850.00

photo [on the left] shows the ticket prices of the very first

Patron A

P 700.00

P700.00

Patron B

P600.00

P 600.00

game of the cup. Weekdays and weekends prices are the

Patron C

P 550.00

P:550.00

same since it was the first game. In comparison with the

Box VIP

P 350.00

P350.00

second photo [on the right side]. it has a much lower price

Box Reg

P 250.00

P 250.00

P150.00 P 150.00

because the second photo is the finals of the cup. That is

Box - SRO

Upper Box

P 100.00
P 100.00

why it has a higher price than the other one. It could be

Upper Box SRO P 75.00

P 75.00

also notice the price difference between the weekdays and

Gen Adm

P 30.00

P 30.00

weekends game. On weekdays, the tickets are lower than

the weekends for the fact that weekdays are working days.

Also, Amazon Marketplace is an e-commerce

amazon marketplace

platform owned and operated by Amazon that enables

third-party sellers to sell new or used products on a

fixed-price online marketplace alongside Amazon's

regular offerings. Using Amazon Marketplace, third-party sellers gain access to

Amazon's customer base, and Amazon expands the offerings on its site without

having to invest in additional inventory. In this selling role, one source the products

sold, create and manage the product listings, control product pricing and supply

lines, and manage sales, shipping, and customer service. So, they pay fees to Amazon

for every item sold. On Amazon, as well as multiple other marketplaces, e-commerce

stores, and sales-related businesses, dynamic pricing is utilized by retailers to

optimize product prices. Dynamic reprising creates flexible prices depending on

many different variables.

Klook's Wilfred Fan predicts a shift to flexible pricing.

Airbnb says it estimated direct economic impact tops 100B. This

KLOOK

is largely based on accommodation, be interesting to see how

much experience can add to this in the coming years.

In using, Foolish Fellowship, Jollibee is a price taker that must accept the going

market price determined by the forces of demand and supply. Their products are

priced with the 'going rate' or in line with the prices charged by direct competitors

Jollibee has fewer stores. It originated in the Philippines and is typically cheaper

than McDonald's. Both offer Filipino-style spaghetti, chicken, and burgers. Jollibee

occasionally has other specials and some unique items not found at McDonald's

Philippines. I.e. There is a burger with pineapple called the aloha burger, they also

have a beef steak with gravy and rice. Jollibee is famous for its chicken joy, or fried

chicken. McDonald's is famous for their burgers. The price of competing products

is used as a benchmark. The business may sell its product at a price above or below

such a benchmark. Setting a price above the benchmark will result in higher profit

per unit but might result in fewer units sold as customers would prefer products

with lower prices. On the other hand, setting a price below the benchmark might

result in more units sold but will cause less profit per unit.

P150mM

In using Foolish Penetration, HanesBrands, Inc. is a socially responsible

manufacturer and marketer of leading everyday basic apparel under some of the

world's strongest apparel brands. HanesBrands, Inc. utilized a penetration pricing

strategy for its Moistfree apparel to provide a low price to capture a large share of

a large market, resulting in lower production costs. However, before implementing

a penetration pricing strategy, they will ensure that it has the production and

distribution capabilities to meet the anticipated increase in demand. With this

strategy, the new MoistFree product demand will attract new buyers or existing

buyers from competitors like Under Armour and Adidas.

Two potential disadvantages HanesBrands can face by using penetration pricing.

They are the competing suppliers the following suit by reducing their price and the

impact of reducing the price on the image of the offering, particularly where buyers

associate price with quality. They planned to face these disadvantages by increasing

advertisements of the MoistFree product if competitors plan to reduce the prices.

Hanesbrands has a great observable fact of considering its price to the product. They

set the price of their product much lesser than Under Armour and Adidas, but they

have the same quality products as their competitors'. Each company uses the same

Texlon fabric, which brings the same effect of ventilating and maximum comfort to the

user. The consumer will understand the quality of the fabric of MoistFree product is

considered the same as the competitors' and would want to buy at a cheaper price with

HanesBrands. With the two disadvantages working for and not against HanesBrand,

this will place a high demand for the MoistFree product.

The marketing strategy of Coca-Cola is a mix of

three important elements - affordable prices, worldwide

accessibility, and great consumer connection. The brand is

present across more than 200 nations and is sold in packets of

various sizes. The products are priced competitively because

of the heavy competition in the soda industry. Coca-Cola's global reach has been made

possible by a large network of more than 250 bottling partners. Its bottling partners

manufacture, package, merchandise and distribute the final branded beverages to its

customers and vending partners. The vendors then sell their products to the consumers.

Its bottling partners work closely with its customers and execute Coca-Cola's localized

strategies. Among a large number of customers of Coca-Cola are restaurants, movie

theaters, amusement parks, and similar other small and big customers.

(The Coca-Cola Company (2015). Retrieved from: https://pdfs.semanticscholar.

org/14aa/048af8ab98ee538c887f27b2570aeb8ef17f.pdf)

Starbucks has a unique marketing strategy that starts right from

its products. It has differentiated itself from others based on the

premium quality of its coffee. From its humble origins in Seattle,

the brand has spread throughout the world to become the number

one coffee retail brand. It's a multinational brand and the newest

chapter in its international growth story is the Asian part. Starbucks has used the

formula of quality-based product differentiation which has resulted in higher

popularity and customer loyalty. However, its marketing strategy is not limited

to only products, but Starbucks is equally great and unique in other aspects of its

marketing and promotion.

(The Marketing Strategy of Starbucks (2019). Retrieved from: https://notesmatic.

com/2017/01/marketing-strategy-of-starbucks/)

Marketing Mix of Uniqlo analyzes the brand/company

which covers 4Ps (Product, Price, Place, Promotion)

UN

and explains the Uniqlo marketing strategy. The article

QLO

elaborates on the pricing, advertising and distribution

strategies used by the company.

· Price: Uniglo is a mid-range product and prices range from $25 to $100. The

pricing is competitive, and they differentiate themselves from the competition

through unique simple designs and bright colors. The quality of the products

is very good and that appeals to the budget customers as well as informed

shoppers. The main pricing strategy in its marketing mix is to compete with

its competitors and build a strong presence. They sell selected products at

promotional prices which are generally $5-$10 less compared to the retail prices.

Uniqlo also provides free shipping on all orders.

· Product: Uniglo is a leading apparel and clothing line, which has a strong

presence in the high-quality casual clothing market. Uniqlo has a wide product

portfolio in its marketing mix and caters to all age groups as well as genders.

. Place: Uniqlo sells through its specialty stores in almost all major cities throughout

the world. Apart from that, it sells online through its website. The company

currently operates 1920 stores throughout the world. Some of the countries of

operation are Australia, Canada, China, France, Germany, Hong Kong, Macau

Indonesia, Japan, Korea, Malaysia, Philippines, Russia, Singapore, Spain, Taiwan

Thailand, UK, etc. Uniglo has an Inventory control team that monitors the store
stocks every week and maintains the optimum level of inventory.

. Promotion: Uniglo has a customer creation team that analyzes the customer

purchase data which helps in gauging the customer preference and design

promotional content accordingly. The companies growing online sales provide the

team with necessary big data on the customer purchases and preferences which

they use in their analysis. They advertise using celebrities like Charlize Theron

who casually relaxes in her car wearing light Uniqlo clothes on a breezy summer

afternoon. This creates a sense of lightness and casual wear for its products. In

another ad campaign, they highlight women from different countries wearing

Uniqlo clothes in their day to day life and they give a tagline "Made for All".

(The marketing mix products (2017). Retrieved from:https://www.mbaskool.com/

marketing-mix/products/17655-uniqlo.html)

In using Generic Strategy, TESCO, the leader in Supermarkets in the UK, has

partnered with SM, the leader in Supermarkets in the Philippines, to distribute Tesco

retail products in the country. Tesco products range from snacks, sauces, beverages,

baking needs, beans, and condiments to personal care, kitchen items, and home

aids. The most affordable category is Tesco Everyday Value, which is equivalent to

the SM Bonus product line.

McDonald's Generic Strategy

McDonald's primary generic strategy is Low-cost leadership.

In Porter's model, this generic strategy involves minimizing

costs to offer products at low prices. As a low-cost provider,

McDonald's offers products that are relatively cheaper compared

to competitors like Arby's. Also, cost minimization is a financial strategic objective

McDonald's

based on the cost leadership generic strategy. However, the company also uses

broad differentiation as a secondary or supporting generic strategy. This secondary

generic strategy involves developing the business and its products to make them

distinct from competitors. For example, through McCafé products, McDonald's

applies the broad differentiation generic strategy. In addition, product innovation is

related to McDonald's broad differentiation generic strategy.

Google Generic Strategy

Google

The generic strategy adopted by Google for building a

source of competitive advantage is that of differentiation.

It involves differentiating the products and services from

the competitors. the main service that Google is known for is its search engine.

Compared to all the other search engines, Google's is not just the fastest but also

the smartest. Apart from the fastest search engine, Google has brought abroad an

array of products and services that are meant for a broad target market made up of

individuals, professionals, and organizations. So, Google's competitive advantage

is going to sustain. The reason is the continuous focus on technological innovation.

pre

Redbox Generic Strategy

The strategy used by Redbox is the Focus Cost strategy.

Redbox is a major DVD rental company, uses vending

machines placed outside grocery stores and other retail outlets

redbox

to rent DVDs of movies for $1. There are ways to view movies

even cheaper, such as through the flat-fee streaming video subscriptions offered

by Netflix. But among firms that rent actual DVDs, Redbox offers unparalleled

levels of low price and high convenience. Redbox machines are available at several

locations in southern Ontario.

Mercedes-Benz Generic Strategy

The generic strategy used by Mercedes-Benz was the Focus

Differentiation strategy. Their dedication to cutting-edge technology,

styling, and safety innovations has made the firm's vehicles prized

Mercedes-Benz by those who are rich enough to afford them.

Mercedes-Benz also has a reputation as a world leader in safety and is renowned

for its huge expenditure in Research and development (R&D). It has won numerous

industry awards for safety and technological innovation. These have strengthened its

desire to continue producing the most technologically advanced cars on the market

in order to differentiate itself from rivals and improved the reputation of its brand.

In using Geographic Pricing, Pizza Hut, the

world's largest pizza chain with over 12000 pizza

TASTIEST

restaurants and delivery outlets worldwide has the

PIZZAS

NOW STARTING AT

vision of becoming the best-branded restaurant with

199

the best delivery and franchise network thereby

providing the best food and best value to the families.

Pizza Hut as a company has always tried to target and

satisfy various diverse customer categories in different countries depending upon

various factors and situations. Total market strategy Pizza Hut started with a single

product i.e. Pizza but with different segments emerging and the degree of competition

increasing, it diversified into several products to serve different segments. It came

up with chicken nuggets, wedges, garlic bread, smiley, etc. International marketing

strategy. Pizza Hut started with a local market strategy in Kansas, the USA then

moved on to regional markets in and across the USA. In 1968, Pizza Hut started its

international movement by opening its 1strestaurant in Canada. And today Pizza Hut

is the world's largest pizza chain with its presence in more than 100 countries. Pizza

Hut mainly sells 4 types of pizzas: Pan Pizza, hand-tossed pizza, stuffed crust pizza,

and Thin N Crispy pizza. Pizza Hut serves these standard style pizzas everywhere in

the world but at the same time, it offers its customers to choose different toppings as

extra mushrooms or extra capsicum and onions with extra cheese or chicken toppings
like toppings of meat, bacon, fish, ham, beef topping, pork toppings, etc. Secondly

it offers what is known as "Value meal combos" wherein it offers a combination of

pizzas, appetizers, beverages, etc. at lower prices. For instance, Pizza hut introduced

"Meal for 2" which offers medium pan/ fresh pizza, garlic breadsticks with 2 glasses

of Pepsi. Similarly, pizza hut also offered "Meals for 4" where it offered 2 medium

pan pizzas, with one plate of garlic bread and one portion of wedges with 4 glasses

of Pepsi/Soup. Pizza Hut by offering standard products seeks economies of scale and

by offering modification options enhance customer satisfaction which adds to brand

equity of Pizza Hut Product innovation strategy. The

SUPREME

high/low pricing strategy has several advantages for

HOT

Pizza Hut Used to create excitement. Set high prices

DEALS

initially to send a signal that its products are the

LARGE PAN PIZZA

3 829

best in quality and the service offered is excellent.

Helps in segmenting the market as Pizza Hut can

sell "the extreme pizza" to the customers who wish

to pay higher prices as well as to the bargain hunters too. Pizza Hut in formulating the

complete pricing strategy focuses on "Value which it is providing to the customers at a

particular price". As far as the pricing of established products is concerned, Pizza hut

believes to give "Value for Money "to its customers. Thus to provide maximum value

to the customers and enhance the brand value, it sometimes maintains the same prices

while sometimes reduces the prices, while sometimes increase prices also. "One-Price"

Strategize. It charges the same price to allot customers under similar conditions and

for the same quantities. This helps in establishing a favorable and fair image among its

customers as well as having a stable market.

Product - pizza hut introduced several locally influenced products according to

the taste buds of local people. Variety -a large variety of pizzas, for example, cheesy

bits, stuffed crust, thin crispy, etc. The quality-large number of market share is with

pizza hut because of high quality. Design always round pizza Packaging- delivery

through hot oven inboxes. Price- uses market skimming price strategy, high price

Promotion -TV ads, newspapers, billboards, etc. promotions like a meal for 2, meal for

4, meal for 6 Place having outlets in shopping malls, roadside, air: recede - Social and

Behavioral Sciences.

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Shopee is the leading e-commerce platform in Southeast Asia And

Taiwan. Launched in 2015, it is a platform tailored for the region, providing

customers with an easy, secure, and fast online shopping experience

through strong payment and fulfill support. The company believes that

online Shopping should be accessible, easy, and enjoyable. The purpose Shopee

of the company believes in the transformative power of technology and want to

change the world for the better by providing a platform to connect buyers and sellers

within one community. Shopee gives amazing deals to all the valued customers, like

vouchers, discounts, and free shipping. It uses Freight-Absorption pricing strategies,

where shop absorbs all or part of the cost of transportation. This amounts to a price

discount and is used as a promotional tactic.

Lazada

Shopee

Checkout

Checkout-

Perkaue 1 ef 1

P187,00

120 00

Oreter Tutal (10-Hemsn)

Vouher

100.00

=157.00

Teml:P1.357,00

In using Going Rate Pricing, Starbucks and Macao Imperial Tea winning strategy;

1. Right market segmentation. The company has stayed with the upper-scale of

the market, competing on quality rather than price. Starbucks is one of the top-

ranked in the coffee industry as well as Macao Imperial Tea who are known for

their Cream Cheese and Chestnut Cream milk tea variants, which is the best-

selling drinks ranked one in the milk tea industry last 2019.

2. Execution. The company continues to focus on its original product bundle that

includes good products, quality service, and a nice environment to hang around.

3. Location and branding give the two franchises a "captive market" and these

advantages have allowed them to endure the many changes they have encountered

over the decades they've been in business. Like the change in consumer

preferences, growing competition, and market saturation. In conclusion, Location

and branding make Macao Imperial Tea and Starbucks operate like ATMs. All

it takes to keep on feeding the machine with cash is to come up with the right

product offerings to capitalize on the advantages that put each of them at the

head of the game in the first place.

JOLLY SUPER

Jollibee is the largest fast-food chain in the Philippines,

MEALS

with over 1,150 stores nationwide. A dominant market

leader in the Philippines, Jollibee enjoys the lion's share of

New

the local market that is more than all the other multinational

.150

brands combined. And Customer satisfaction has always

been key to Jollibee's success. Never losing sight of its goals, Jollibee has grown to

be one of the most recognized and highly preferred brands in the Philippines. Now

the market leader among fast-food chains in the Philippines, claiming a market share

that totals more than half of the entire industry. Also, Jollibee provides a coupon for

everyone to avail of their product. And all their foods are affordable for everyone.

SM Supermalls is one of Southeast Asia's biggest developers

and the operators of 72 malls in the Philippines, and 8 malls

in China. SM Supermalls provides family fun experiences as

it partners with the best-loved brands and events. Also, SM

Supermalls having a sale or discount price up to 70% in selected

items to increase the demand for their product.

In using High/Low Pricing prices of products of both

Nike and Adidas are high, with Nike products' price

being higher as compared to Adidas. The pricing strategy

used by Adidas is that of a market skimming strategy.

Adidas products' prices are dependent on looks and

$6997

color. An example is where a pair of Adidas white color

shoes are more expensive in comparison with another pair

of shoes of the same quality but in a different color. The price of Nike products is

relatively higher when compared to Adidas ones. It uses value-based pricing and price

leadership strategies, where the price of the product is based on the value that is placed

on that particular product by the consumer. To remain relevant in the market, Nike

uses competitive and different pricing strategies from those of Adidas. The pricing

strategies of Nike are based on premium segments as their target customers. Brand of

Nike has high premiums, and this explains why their prices are higher when compared

to Adidas. Promotional & Advertising Strategy by Nike & Adidas. Typically, it has a

strong belief that "discount sales = low price" Customers for firms adopting this type

of strategy also have a strong preference in purchasing the products sold in this type
or by this certain firm. They are loyal to a specific brand. Many big firms are using this

type of pricing strategy (ex: Reebok, Nike, Adidas). The way competition prevails in

the shoe industry is through high-low price.

Another good example of a product that uses this kind of strategy is the Apple

Company. Apple has played this game with itself by launching products such as the

iPhone at artificially high reference prices - the iPhone cost $599 when it first hit the

streets- and then rapidly lowering that price. Today, a $199 iPhone seems like a steal;

Apple in essence is using its first-iteration pricing as a reference to make its current

products feel affordable. They do this kind of strategy every time they release a new

version of a new line of the product under its name. Apple will lower the price range

of the older line of products every time they release new ones. This makes the older

ones seem cheaper than when they first released it.

In using Horizontal Price Fixing when iPhone 4s

was introduced in the market four years ago, its price

was huge. Few people could afford an iPhone. As time

passed, prices of the iPhone 4s have decreased gradually,

such that nowadays many people can afford an iPhone.

A few days ago iPhone 7 has been launched in the market. Before that iPhone 6 was

launched. Both these phones sold in large quantities and at a very high price. In

fact, after long debates and reviews regarding the quality and the increased price

of the phone, people decided to wait until they will be able to buy the iPhone 7.

Presumably, the price of the current iPhone 7 will decrease drastically in the next

.r. Some technological firms offer freebies to their customer in every purchase

product/ cellphone either new or old unit.

In using Image Pricing since Image Pricing involves setting prices higher than

mal to stand the better quality of the Most of the fashion industry like Channel,

olex, Apple and Nike, and many more luxury products use this pricing strategy.

one example here is the Apple Watch Limited Edition In which Premium pricing

akes products look exclusive and high quality by giving it a high price. Tech
ciants Apple has been selling their line of products such as iPhone, Ipad, and the

Pod for about a decade now. Their strategy for pricing and marketing is that of

differentiation. They make high-quality items that their competitors would find

hard to mimic and sell at a lower price for the same benefits.

In using Impact of Price on Other Parties recently opened in the first quarter

of 2016, the fifth branch in the Bag of Beans line is named after the owner Charito.

Designed to capture high-end than the rest of its predecessors, French-style Semi-

fine dining restaurant. Chariot presents special drink each month to excite regulars

and visitors who are always coming back for more. Freshly baked goodies are

available day and night from its dedicated pastry store, great for romantic dates

and private dinners, chariot earned its reputation highly-noted venue for wedding

engagements and marriage proposals. Even for families who just want to relax and

feast on various delectable food options.

The Conti's bakeshop and Restaurant offers bakeshop creations that have shared

joy in birthdays, anniversaries, Christmas, weddings, and many different events.

Their cakes can be ordered either on the whole or by slice both regular and mini sizes.

They offer Frozen cakes like Blueberry cheesecake, mango cheesecake cookies,

and cream cheesecake, turtle pie and sans rival also Chilled cakes chocolate mousse

choco overload, moist chocolate cake, mocha tiramisu, strawberry shortcake. Contis

uses their edge of having a passion to create delectable food and comforting warmth

of one's own home. Since 1997 in Paranaque bakeshop and restaurant of countries

has created and shared a lot of happy memories with a different type of people. With

the satisfaction of every guest that they encounter their store has been talking of the

town who gives a vibe of a family restaurant that brings the feeling of home, and

they extend their hospitality in ten communities serving more than 150 dishes that

help them write their success that they have today.

In using Increase Price and Quality, Bazaar is offering socks for

a lower price. Socks are 3 for 100 pesos. They attract many customers

because of its affordable price but they need to improve quality.

Uniqlo is a well-known clothing line, they are also selling socks.

The price is a bit higher but the quality is excellent.

In using Individualized Variable Pricing, one example is an experience of a

man named Rafi Mohammed on October 20, 2017, when he was searching for a

Vacation package to New York City using Orbitz's iPhone app. Mr. Mohammed

was looking for a vacation package to New York City using his Orbit's iPhone app.

While on settling on a hotel, he accessed Orbitz's website on his laptop to book the

package. He realized that the package on his laptop - identical flights, hotel, room

type - was $117 more (6.5% more) than the price on Orbitz's app. A quick scan

found that prices of identical vacation packages often differ between Orbitz's apn

and website. He then did a side-by-side app test of the same package with a friend

who was sitting next to him. His friend's Orbitz app price was $50 (2.8%) more than

his app price. Amazingly, Orbitz knew something that he regularly gives his friend

good-natured grief about his friend overpays for almost everything. When he

shared his results with Expedia (the parent company of Orbitz), its spokeswoman

explained that the pricing differences he found between the app and website can

be because its suppliers allow different prices to be offered to mobile customers as

well as members (no fee to join) who are logged in.

In that situation, prices of vacation packages vary as to what the customers are

using (may it be an app or a website) or a mobile customer versus a member (no

fee to join) who are logged in. By that, retailers evaluate their customers in terms of

their capacity and willingness to pay and Individualized Variable Pricing Strategy is

present. This can be viewed as unfair for those who pay higher than the actual price

but it also seems beneficial to those who couldn't pay more. Retailers at this type of

strategy evaluate the characteristics and actions of each shopper to create a profile that

generates a personalized price.

Another example of Personalized Pricing can also be found at most auto

dealerships. The goal of salespeople is to determine how much each customer is

willing to pay for a car through individualized negotiation. Prices are tailored by
noting each customer's characteristics and observing their actions. How shoppers

dress, the car they currently drive, and answers to seemingly innocuous questions

(Where do you live? What do you do for a living?) provide clues. Salespeople also

observe actions, such as the other cars people are looking at and how they behave in

negotiations (passive or aggressive). Evaluating each shopper's characteristics and

actions create a pricing profile. Think of a profile as a polygraph test that suggests

the highest amount each shopper will pay. Web retailers can similarly profile

their shoppers. Just as someone's clothing can provide pricing clues, so can how

a customer accesses an online store. Is a shopper using a laptop, app, desktop, or

internet on their smartphone? What operating system are they using? Where are

they located? A customer's actions also provide pricing clues: What other products

are they looking at? How many times have they visited the site? Much like car

salespeople, web retailers can electronically evaluate the characteristics and actions

of each shopper to create a profile that generates a personalized price.

In using Initial Mark-up, optical is well known for Its

quality products and good service they are also good at

implementing pricing strategy. Executive Optical wise in

putting markups to their products that's the reason why

EO-Executive Optical is one the leading eyewear industry

in the Philippines. A comprehensive eye checkup is

Optical Shop

performed by a well-trained and competent optometrist.

They also use only state-of-the-art facilities and eye care

equipment. Having clear eyesight is essential to fulfilling one's potential. Many

are dire need of proper eye care and eyeglasses but could not afford the cost. The

company maintains lower prices to attract more customers. They offer different

varieties of choices to meet the expectations of the customer through the products

they offer.

In using Initiating Pricing Increase, the increasing capacity of flour millers and the
entry of two more players will keep flour prices in the country competitive, according

to the Philippine Association of Flour Millers Inc. Philippine flour prices declined to

P670 per 25-kilogram bag this year from a range of P870 to P900 a bag four years

ago. Inflation is the rate at which the general level of prices for goods and services is

rising and, consequently, the purchasing power of currency is falling. As reported by

the National Statistics Office, the Philippines' annual inflation rate slowed to 1.3% in

January of 2016 from 1.5% in December 2015. This will also serve as a disadvantage to

the public as well as the bread industry in the country since the annual inflation rate

still increased even if the increase went slower by 0.2%.

According to the vendor in Alabang Muntinlupa, the increase in the price of

ingredients affects the sale retail price of the bread. The vendor said that they've

been doing everything to bear the higher costs and been cutting operating costs to

keep prices low but prices of flour went up every time. The reason for this problem

was price hikes on the prices of bread and other flour-based products. The latest

increase in the price of flour causes vendors to make extra costs to consumers.

Compared to the statement of the vendor in Sta. Rosa, Laguna, sometimes

when the increase of prices of ingredients results in few productions of the bread

because the customers do not patronize their bakeshop because of the products

being sold and customers may look for another bakeshop. Besides, consumers

now prefer higher-quality products but they are buying less, not like before. The

rise in food prices causes negative impacts in weak food-importing countries

threatening their security. High-priced food reduces the real income of the most

vulnerable poor populations which may cause internal troubles. One thing that

keeps them running is to give their best and skills, it's important to value what

you do. Simply, if it looks good and tastes great, people will pay for it. Valuing

your goods at what you feel they're worth can help you maintain a low-cost

percentage. That will benefit both the seller and the buyer.

Initiating and Responding to Price Changes; Initiating Price Cuts

The Ma. Mami House in Santa Rosa, Laguna, and the Mami Stall
in Nagcarlan, Laguna. They are offering the same product but in

different price.

The quality of ambiance of the stall at ground floor in the mall is different from

the stall in Nagcarlan because the Mami house of Nagcarlan is just located at the

wet market and the customers are the drivers, salespersons in the wet market, and

other people who passed by who have needs in satisfying their hunger. But even

this stall is just small, they have regular customers, and the taste of the food is very

satisfactory even it is at a low price and not that good in terms of the physical image

of the store. In one serving the special mami is 40 pesos while the regular is 30 pesos

In contrast, Mami Restaurant is different. They have a pleasant ambiance becaus

they are located at the mall wherein the customers are the mall shoppers or h

salespersons of different stores. When it comes to the quality of the foods, it also has

a good taste, clean, and very satisfactory. The price of the foods in Ma. Mami Houss

depends on the types of mami.

The mami house in Nagcarlan, Laguna's competitive advantage

is having a good quality of food and service but in different price

offerings. They can capture a large market share in the area by using

that strategy.

In using International Pricing Strategy, Coca-Cola or popularly known as Coke.

is a world-famous carbonated soft drink. Coca-Cola dominated the world's soft drink

market throughout the 20th Century. The main ingredients of the drink are hidden

in its name - Coca leaves and Kola nuts i.e. a source of caffeine. Given Interbrand's

"best worldwide brand" investigation of 2015, Coca-Cola was the world's third most

profitable brand, after Apple and Google. In 2013, Coke items were sold in more than 200

nations around the world, with shoppers drinking more than 1.8 billion organization

refreshment servings each day. Coke additionally utilizes an international pricing

strategy. For example, the cost of a 2-liter container of Coke in the United States is

unique about the cost of a similar item in China. This needs to do with the distinction

in financial conditions, aggressive circumstances, and laws. Along these lines, Coca
Cola has been following different evaluating procedures because of the necessity and

considering the presentation of new items focusing on various gatherings of people.

In using Liquidating Markdown Merchandise, there is a lot of companies here in

the Philippines that Liquidly markdown merchandise to maximize their sale. One of

the best examples of this is Nike. Nike is one of the most sought-after brands when

it comes to athletic shoes, fitness clothes, and high-quality sports equipment. Good

thing Nike Factory Outlet Stores have several branches around the metro. They store

quality items at an affordable price. Nike Factory consolidated its product and sell to

the other retail brand store like Capital Ph that sells a wide array of shoes on sale. The

playground premium outlet, a couple of thousand bucks could cop a nice pair. Major

sports brands especially Nike are available at outlet prices and huge discounts.

As such, Playground's Buy 1 Take 1 Sale Events are infamously well-attended.

These are just an example of a store that Nike products are consolidated and available

at a lower price.

Furthermore, one of the strategies to liquidate merchandise is to sell online or in

an Internet auction. Internet Auction is still in its infancy in the Philippines but may

one day be the biggest catalyst in bringing e-commerce to the Philippines because

people love to shop for bargains and auction houses are great places to sell items you

don't need or use anymore. It is also a rational market where buyers and sellers meet

at large to discuss sales on possible items. This is even more true for countries like the

Philippines where people don't have the same purchasing power as those in other

countries, hence auctions may seem like a natural fit here and will play a big role in

how e-commerce will be conducted in the future. Pinoy auctions are probably the

et popular and arguably the biggest of them all. Thousands of things to choose

The best example of e-commerce platforms is Lazada. According to the price

hts (price.ph) which present the Map of E-Commerce to rank the Philippines'

-commerce players based on average quarterly traffic, mobile application

Pring, and social media followers, Lazada is way ahead of its competitors. And For

copularity among Filipino consumers, it helps that Lazada, which sells fashion
s barel, electronics, car accessories, and home appliances, has agreed long to allow

apil giant SM Investments to use the store to sell its merchandise. Aside from SM a

It of stores also cater to its product as a way of maximizing its sale. Indeed, selling

merchandise online is one of the best ways to liquidate merchandise.

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ELEVEn

In using Location-Based Pricing, 7Eleven always apply the Location Pricing

Strategy. Most of their products are priced differently depending on the location of

the store. Price changes vary on the capacity of the customers living in one vicinity.

They conducted researches in one particular place before setting price on the product

normally they consider the demographic profile of the consumers in one vicinity.

In using, "Loss Leader Pricing", SM Department Store is one of

BIG

the most popular shopping malls build not only in the Philippines

SALE

but also in China. It all started from Henry Sy Jr., a Chinese-Filipino

50% OFF

business magnate and philanthropist, who was known for cleaning

shoes before developing SM. SM department store is only a part of the

whole mall but plays a big role in contributing large profits in the mall.

During changing season, the department store uses a loss

leader to attract more consumers to buy the product under loss

leader which commonly are those excess products during the past

season but mainly, their priority is to introduce the newly launched

product for the upcoming new season.

For example, the target consumers are those who look for summer outfits and

supplies. To attract new consumers, the department store began to put Christmas

attires and stuffs at loss leader halfway before the summer season starts.

Gillette is a famous example of a company that employed a loss leader pricing

strategy in their business model. Several years ago, Gillette was the leader in selling

razor blades by following an ingenious strategy: selling their mechanical razor well

below the cost to draw new customers. Consider the move as "introductory" pricing

Gillette wanted to build a customer base and stimulate future sales of their products.

The blades sold or given away by Gillette did not last very long. Customers who

finished using Gillette's razor typically ended up buying a replacement razor and/

or other products of Gillette. The business model played out successfully for Gillette.

which saw high recurring sales for the company.

(https://corporatefinanceinstitute.com/resources/knowledge/strategy/loss-leader-

pricing/)

Leader Pricing

Leader pricing occurs when a supermarket sells high-demand items at atypically

low prices, even if those prices require taking a loss on that particular item. For

example, supermarkets often have temporary discounts on coffee or other household

essentials. The goal is to attract consumers in search of the bargain. Those bargain

hunters are likely to buy other items if only out of convenience, which is how the

store remains profitable. Supermarkets often use leader pricing on a limited basis

as part of a temporary sale. One problem with this approach is, consumers begin to

mistrust advertisements. For instance, a customer might hear about a bargain but

worry that the promotion will end before he has time to get to the store or believe

there is a hidden catch, like a requirement to buy a large number of items. One

way supermarkets can collect valuable customer data is to create a loyalty program.

This requires customers to opt into a data-collection program, which tracks their

purchases. Such programs offer several price strategy enhancements.

GIVEAWAY SHARE & TAG

First, joining the program qualifies customers to receive

FREE $200 LIGHT or $100 ORDER DISCOUNT

lower prices. Second, the supermarket can use the data to create

BLACK FRIDAY SALE

pricing profiles, predict buying habits, and otherwise optimize

NOV 28-NOV 2D

SP & TS

their pricing strategies. Finally, knowing what customers

-15%

buy habitually allows supermarkets to offer coupons and

promotional discounts in a targeted manner, lowering the cost

DISCOUNT

of promotions while increasing their effectiveness. Supermarket

chains have volumes of data on consumer buying habits.

Some use this to construct pricing profiles for different stores, which is called zone

pricing. Establishing different pricing profiles, or zones, allows the supermarket to

optimize its prices by region. Customers in high-income regions, for example, might

be willing to pay more for bathroom tissue than customers located elsewhere. The

supermarket chain can tailor the prices found at different stores to maximize profits

across regions. Price wars happen when companies intentionally undercut each

other. For example, when one company lowers its price to meet the loss leader, the

market leader may further cut its prices to keep or gain more market share. This can

happen for an extended period, spiraling into a price war. Major examples of price

wars have been with Apple and Samsung and Wal-Mart and Amazon.

Amazon and eBay are the best examples of businesses that are

using loss leader pricing. They started the online business trend by

offering users special discounts on selected goods. If you ever go

LAYEST MARTPHONES

GREATEST DCA

HOURS ONLY

to their sites, you will see landing pages or banners of promotional

offers on some products. When you click on them and view the actual

SALE
product, you will notice something else that entices many online

customers. There is a section called "People also viewed" to attract

customers to view other products that may not even be discounted.

Amazon

rhe goods being promoted are the loss leaders because the online retailer wants to

ttract viewers into going through their website and see the goods. In doing so, the

ewers will be exposed to other products, or leads, that are at a higher price but just

s appealing. Typically, the leads are related to the loss leaders to get more people

to viewing them and even buying them. This is a very good way of increasing sales.

Following the success of these tactics by Amazon and eBay, many brick and

mortar stores decided to follow suit and create their e-commerce solutions for

buyers. Now major retailers like IKEA, H&M, and Best Buy have online stores

using loss leader pricing as an effective strategy to entice more customers into

buying goods online and increasing traffic to the site.

CHEERS for

. DEALS

DED

Other retailers like car dealers use this practice as

well. They advertise an incredible price on a car or truck,

10K

28K

38K

but if one look closely it is just that one stock item. They

even include the stock number in the advertisement. So

12K

10K

when a customer arrives, they say "sorry we sold that

truck, but we have these others for you to look at."

In using Maintained Markup, Havaianas is a Brazilian brand of flip-flop

sandals created and patented in 1962. It is currently owned by

Brazilian manufacturing company Alpargatas S.A. Inspired by

Japanese zori sandals, Robert Fraser became the first to mass-

produce flip-flops out of rubber. Havaianas was using the same

basic strategy without changing the product, communication, or

promotion. In Brazil, Havaianas were marketed at relatively low

prices. However, the Company had an opportunity to position the sandals for a

market with a high purchasing power, such as the U.S., Australia, and Europe.

The best example of company and product is sandals from Havaianas, as we

can see on the Havaianas store or on other stores that sell sandals of Havaianas.

Even well-known sandals and flip flop brands can still experience having a non-

selling product to their business. If there's a non-selling product to their business

they reduce its cost but still profitable.

In using Maintain Price and Add Value, In this firm, Popeyes Restaurant

serves to be one of the fast-food chains that maintain Price to their product most

especially their chicken fillet, with this stuff they will assure to be the same with

other competitors since they knew that their competitors surround them. As to this,

they remain the same to be secure on what bad things will happen in the future.

Popeye's Restaurant practice Maintain Price and Add Value to get more customers

and serve them with passion and love.

CHE

PoPeYes

McDonald's (Chicken Fillet)

ICE

RIGE RI

Mcdonald's

McDonald's Corp.'s heightened focus on low prices is helping the burger giant

win back customers from rival fast-food chains with the same price they offer many

of the customers become loyal to them. This kind of treatment will surely make
them be on top. As McDonald practice the Maintain Price strategy and add value

strategy it helps a lot in improving the pricing strategies they have, as to this in

maintaining price it was seen in their product chicken fillet. As we notice we can eat

a lot of time with this product but the price remains the same, basically because of

many competitors nearby their place. It adds a factor to McDonald's not to increase

or even decrease the price of chicken fillet. On the other hand, some products

have improvements that are why the company needs to add value because of the

upgraded features of it.

This pricing strategy helps encourage consumers to purchase the company's

products based on perceived affordability. Thus, this element of McDonald's

marketing mix highlights the importance of maintaining Price and add value to

encourage customers to buy more products.

Starbucks (Coffee)

One of the companies that practice both maintain price and add

value is Starbucks. They claim the price increase is due to rising labor

and non-coffee commodity costs, but with the significantly lower

coffee costs already improving their profit margins, it seems unlikely

this justification is the true reason for the hike in prices. Besides, the

price hike was applied to less than a third of their beverages and only

targets certain regions. In this thing, they maintain the price of some of their product

as they practice this strategy, as well as they also practice the add value strategy on

which they add value to some of their beverages since they offer the upgraded features

of it. Implementing such a specific and minor price increase when the bottom line is

already in great shape might seem like a greedy tactic, but the Starbucks approach

to pricing is one we can all use to improve our margins. As we've said before, it only

takes a 1% increase in prices to raise profits by an average of 11%.

With the ability of Starbucks to maximize their known profit

on a higher level, they master employing value-based pricing.

Profit maximization is the process by which a company determines

the price and product output level that generates the most profit.

While that may seem obvious to anyone involved in running a business, it's rar

to see companies using a value-based pricing approach to effectively uncover the

maximum amount a customer base is willing to spend on their products.

In using Marginal Cost Pricing, there are various businesses that utilize

barginal cost pricing. The said strategy is mostly used by small businesses that are

Harting and want to create product demand. The low prices drive their inventories

ickly and allow them to sell their products in large volumes and return and

creates high revenue.

The travel industry often employs marginal cost pricing to fill capacity. Hotels,

irlines, and resorts must achieve a minimum capacity to sustain a profit. Not only

do these agencies fail to bring in revenue whenever they are underbooked, but

they also lose money in maintenance costs and staff salaries. The travel web site

Price Line enables users to name their price for their travel needs. The bid process

allows airlines to sell empty seats and hotels to fill empty rooms, even if the bid

price was far lower than the retail price.

Save more on your next hotel

Thoysandi of deals made evity day

Have you tried

Cruise Offer

Retailers such as Walmart also employ marginal

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pricing on seasonal items that have gone out of date. The

price of a heavy coat, for example, will be much lower in

the warmer months of spring and summer than in the fall

or winter. The marginal pricing practice ensures that the

retailer will see some revenue from off-season items.

Overall, based on the gathered data and the companies

shown, it is, therefore, safe to conclude that marginal cost

yamart

pricing is an efficient pricing strategy for small businesses

because they have minimal fixed costs and they sell items

in large volumes to gain higher profit. This will help them

assess their profit, production, and cost management

through cost volume profit relationships. But for bigger

companies with a wide array of operations and therefore has bigger fixed costs,

marginal cost pricing is often employed only as a short-term solution and on a time-

limited basis like what Walmart does on its off-season items and what Price Line

does in their unbooked airlines, hotels, and resorts. For these big companies, it is

not a method to be used for normal pricing activities, since it sets a minimum price

from which a company will earn only minimal profits. Also, for these big businesses,

marginal cost pricing is least useful in the long term, due to the reason that these

firms need to generate sufficient profit to pay for a large number of fixed costs.

In using Markdown Strategy, Walmart Inc. is an American multinational retail

corporation that operates a chain of hypermarkets, discount department stores,

and grocery stores, headquartered in Bentonville, Arkansas. The company was

founded by Sam Walton in 1962 and incorporated on October 31, 1969. Walmart is

very sneaky with its markdown system, so here's a breakdown of how it works so

you can score the best deal: Prices ending in "7" display the item's original price;

prices ending in "5" come after the item's first markdown; and those ending in "1"

or "0" signify the final markdown. For example, if you see a product marked at

$49.97, then you know that it's the original price and should wait for markdowns.

When the product is marked down for the first time, it will be priced at something

like $39.95. Finally, when it's marked down for the last time, it will most likely be

sold somewhere around $29.91.

(Moor, A. (June 25, 2019).29 Amazing Secrets Only Walmart Employees Knows: Yes,

There's a method to the markdown madness. Retrieved from https://bestlifeonline.

com/walmart-shopping-tips/)
Each week Target marks down items in certain departments, in most cases, the

first markdown will be 30% off. If something is marked down one week, generally,

in two weeks or so it will get marked down to 50% off, then a couple of weeks later

it will finally get marked down to 70% off. This means that if you're willing to wait a

couple of weeks you can get items for up to 70% off. Be careful though, really hot items

tend to go fast so make sure to grab a good deal when you see it because it might not

stick around. If there is only one item left at 30% off, the odds of it making it to 70% or

even 50% off are slim, so there are some instances where you will want to buy an item

sooner rather than later.

(Christy (n.d.). All Things Target. Retrieved from https://www.allthingstarget.com/

markdown-schedule/)

In using Market Demand-Based Pricing, there are

several examples of demand-based pricing that can be

seen in a variety of products, companies, and industries.

One example of this is Walt Disney World in Florida and

Disneyland in California, which now increases their ticket

prices during holidays and certain weekends, in contrast

to times when there is less demand. The Walt Disney Company introduced demand-

based pricing at its US parks, which means guests who show up on busy days will

be asked to pay even more per ticket. A single-day ticket for Disneyland in Anaheim,

Calif. is currently $99. Under the new plan, that price will vary daily based on the

estimated number of guests-$95 on "value" days, $105 on regular days, and $119 on

peak days. Peak and regular days make up 70% of the calendar.

In the U.S., other theme park operators have also embraced this type of pricing

such as Universal Studios. Besides, demand-based pricing is also utilized in the

lodging, airline, and restaurant industries.

In using Market Skimming and Financial Objectives,

Smart Pillow will be introduced in the market with a high-

price for it is a new, innovative, and improved product. After

some time, if it's no longer selling at its peak price, my smart

How will be sold into a lesser price to be disposed of and by then already have

thought of a new product to sell again, applying m

My target market is stressed-mothers and working adults who are in need to feel

Market-skimming pricing tactic.

on a vacation even though sleeping. Being at home,

outside with lots of chaos and expenses.

well-rested is better than going

Many companies that invent new products set high initial prices to 'skim'

revenues layer by layer from the market. Sony frequently uses this strategy, called

"Market-Skimming Pricing" (or price skimming). When Apple first introduced the

iPhone, it charged an initial price of as much as $599 per phone. The phones were

purchased only by customers who wanted the sleek new smartphone and could

afford to pay a high price for it.

Apple introduced the iPhone at $599 to capitalize on the early

adopters' tendency to hastily buy new technology. As initial

demand subsided, Apple reduced the price to $399 in an attempt

to revive demand. Apple sold at least 500,000 iPhones at $599,

making $100 million in extra profit by exploiting favorable market conditions and

cleverly using the skimming pricing tactics. From this example, we can deduce

that the base price for the first iPhone with 8 GB of memory was $399 all along and

that Apple temporarily placed a markup of $200 as a consequence of applying the

skimming pricing tactic.

Another good example of this includes the launch of the new

Porsche Cayenne - their SUV in 2003. There were other SUVs out

there, but Porsche knew if they could identify what customers

were willing to pay first, build a product with specifications the

customer wanted, whilst also bringing their speedy heritage into the design, they

could command a higher price and attack the already established SUV market. The
Cayenne now makes up about 1/3 of their revenue and is a hugely profitable model.

Selecta ice cream by Walls is an example of a level 1 market-

driving strategy. Selecta is the dominant brand of ice cream in the

BIRTH

Philippines, but it was not so a few years ago, as it was neck-to-

neck with Nestle. Problematic with declining industry demand,

the marketers went on to ask mothers what they liked to serve during birthdays and

what they served. The result of their in sighting led them to launch Selecta's 3-in-1

ice cream, combining three of the favorite ice cream flavors in a tub at an affordable

price. With this huge success that turned around shrinking industry demand, they

even extended to four flavors with 3-in-1 plus 1, wanting to own the term "3-in-1."

In using Maximum Market Share, Burger King (BK) is an American multinational

chain of hamburger fast-food restaurants. Headquartered in the unincorporated area

of Miami-Dade County, Florida, the company was founded in 1953 as Insta-Burger

King, a Jacksonville, Florida-based restaurant chain. After Insta-Burger King ran

into financial difficulties in 1954, its two Miami-based franchisees David Edgerton

and James McLamore purchased the company and renamed it "Burger King". Over

the next half-century, the company changed hands four times, with its third set of

owners, a partnership of TPG Capital, Bain Capital, and Goldman Sachs Capital

Partners, taking it public in 2002. Burger King is one of the most popular fast food

in the Philippines. They offer different types of food such as burgers and fries. The

menu of Burger Kings expanded from a basic offering of burgers, French fries, sodas

and milkshakes. The "Whopper" became the first major addition to the menu, and

it has become Burger King's signature product since. Conversely, Burger King has

introduced many products that failed to catch hold in the marketplace. Some of these

failures in the United States have seen success in foreign markets, where Burger King

has also tailored its menu for regional tastes. The Burger King aims to offer reasonably

priced quality food served quickly in an attractive clean surroundings. They offer

delivery where you can call or order meals only through their websites.
KING MEALS

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The picture shows its menu. As it has seen the price of each burger cost only with

the lowest price P39.00 and the highest is P99.00. It also offers a super meal which

includes fries and drinks. But the price of each also increases.

On the other hand, Zark's Burgers started only as a 20-seater, three men

powered restaurant in 2009. It is owned by Rolandrei Viktor Varona who is called

by his friends as Mizarks or simply Zacks. Zark's Burgers started only as of the
owner's dream of opening his restaurant, a burger chain that is affordable for all.

Mr. Varona is an HRM graduate who worked on a cruise ship and was an OFW.

Currently, he is the owner and president of Zark's Burger. What makes this burger

house different from other restaurants is that the owner himself loves burgers

and served as its inspiration in putting up the restaurant as a whole. Aside from

that, this burger house also offers affordable burgers that are equally delicious

compared to known fast-food chains like Burgoo and Fridays. The success of

this burger house is also because of the owner's efforts, he does not only see and

consider Zark's Burgers as a business but more of a passion or hobby.

ALL TIME FAVORITE

P19

P159

The picture on the previous page shows the menu of Zack's Burger, their menu

price is more expensive than the Burger King. The lowest price cost P119.00 unlike the

ther one which is just P39.00 and the highest cost ₱319.00 compared to Burger King

which only cost ₱99.00

In using Maximum Market Skimming, when iPhone 4s was

introduced in the market 4 years ago, its price was huge. Few

people could afford an iPhone. With time, prices of the iPhone 4s

have decreased gradually, such that nowadays many people can

afford an iPhone.

The strategy that Apple is using is known as the skimming pricing strategy. Apple

is only just an example of one of the companies performing skimming pricing, but the

list can go on and on, especially in the electronics industry.

As it can be understood from the iPhone example, the strategy that Apple is using

consists keeping the highest initial price that the first customers will pay and as soon

as the demand of the first customers is satisfied (commonly known as innovators

group), the company will lower down the prices over time. But if that in a matter

of perspective, then it wouldn't buy an iPhone now because it will be inferior to the
current iPhone. This can be one big disadvantage of the skimming pricing strategy,

as the companies can develop negative publicity if they lower the price too fast and

without significant product changes.

The initial purchasers can feel frustrated and ripped off by the changes in prices for

the same product that they have purchased at higher costs. The ones that are initially

targeted are the early adopters, and when the product reaches into the maturity stage

prices drop to target the more price-sensitive segments. The word-of-mouth is also

a useful part, as the early adopter will also play the role of spreading the news and

convince relatives and friends to purchase the respective product.

Sony PlayStation 3

The PlayStation 3 was originally sold at $599 in the US market, but it has been

gradually reduced to below $200.

DVD players

Initially in the 1990s when DVD players were launched, the

price of a DVD player was $500 and $400. By 2001 the prices were

skimmed to less than a $100. By 2004 DVD players available for as

low as $50 or $60.

In using Multiple Unit Pricing, it is a method for setting the item price for each

successive unit of an item sold when multiple units are the same item are sold.

The item price is set on an item-by-item basis. Multiple pricing is not a discount; it

nultiple unit pricing.

specifies the regular selling price of each item eligible for the mul

It is not a mix match pricine scheme, which sets the price for a collection of ite

rather than each item.

This is a Multiple Unit Pricing in a supermarket

Wherein the price is 6.99 for a 24pk tray of Pepsi Cola and

the customer will save a 5.50 each. When a customer buys

a bundle of that product they save can more. The strategy

of Multiple Unit Pricing is used either by organizations or

E9.00

29.00

E9.00

retailers to push their products for higher sales. Higher

sales are targeted to achieve higher market potential and higher conversion of the

customers. Usually, this is implemented during large sale days, which are coupled with

festival days or other shopping days. The price is reduced with the bulk purchase, and

the customer is shown about the drastic reduction in price and the price benefit which

he will be achieving. Higher sales are also a concern in the case of target achievement

when the target of the sales team is to be achieved, and the duration for Sales closing is

very less, in such cases, high sales become a priority, and Multiple-unit pricing is used.

Pepsi

Multiple-unit pricing is used to push its product for

higher sales. Higher sales are targeted to achieve higher

market potential and higher conversion of the customers.

699

Higher sales are also a concern in the case of target

achievement. Multiple unit pricing is also used in case of

customized deals. When there are bulk orders and customized deals, the buyer

expects a better price on the products. Few free units are coupled with the order to

reduce the per product price, thereby implementing Multiple Unit Pricing.

It is used in customized deals in case of dealing with supplier-manufacturer deals.

For example, the deal is that on purchase of 100 units of a certain product, the supplier
will get ten units for free of cost, the buyer can propose a deal of buying 500 units of

products at one time and request for 60 units free. This pricing strategy is the single

greatest lever that has to improve profitability, and profits will increase further when

it is price strategically made. It sets a product's price based on the product's value to

the customer, or on competitive strategy, rather than on the cost of production.

In using Non-Price Responses Competitions, McDonald's, the American

hamburger and fast food restaurant giant uses a wide range of both non-price and price

competition. It claims to buy coffee beans that are 'fair trade' and have the 'Rainforest

Alliance Group' seal of approval. This is an effective way for McDonald's to boost sales

because it does not have to alter the price of the cups of coffee it sells. In nearly every

McDonald's restaurant across the globe today, offers free Wi-Fi. Through bulk-buying

and negotiating a lower price for the purchase of several internet connections, the

company has been able to increase sales without the need for the high costs involved

with a major advertising campaign.

Regarding McDonald's, the New Zealand Qualifications Authority writes:

PPLEPIE

"By differentiating their product McDonald's doesn't need to make major changes

to its products. McDonald's constant endeavor to improve New Zealanders' opinion

has caused them to switch to free-range eggs and so create for themselves a lasting

image as a company that considers animal welfare to be important.

Pharma companies

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The pharmaceutical industry is full of brand name products and generics which

become available when the active ingredient's patent has expired. Companies face

strong pricing competition from businesses that manufacture generic equivalents

of their brand-name medications. However, in virtually every case, the brand-name

owner avoids reacting with pricing strategies, and instead uses a non-price competition

marketing approach.

For example, the brand name Tylenol is owned by McNeil Consumer Healthcare,

a subsidiary of Johnson & Johnson. Even though the active ingredients and dosages

of Tylenol are the same as its generic equivalents, marketing the brand name's quality

and superiority still works and results in healthy profits.

In using Odd Pricing, this is the example of two firms that use odd pricing strategy.

The first one is the XBOX 360 by MICROSOFT, they used odd numbers as the ending

of their price 399.99. The second firm is COCA-COLA, they also used an odd number

as the ending of their price per pack. They used it as a trick to the buyers that intently

to look cheaper than the other choices.

The odd pricing strategy relies on the fact that consumers highly value their time

when evaluating prices. There is an increasing time cost associated with examining

each additional digit within any given number, which means that when examinins

a price, the first digits carry more weight than the last ones. The relevance rate fo

each digit and hence define the two concepts of "perceived price" and "true price". A

consumer needs to evaluate the price of 399.99. The first digit carries more than 50%
of the information because 300 represents more than 50% of the price, meaning that

the consumer will read and understand this figure clearly. Since the second digit (90)

carries about 40% of the meaning of the price, the consumer will read this number

too. Then, the third digit (9) carries only 2% of the overall price information and is

therefore, less relevant. In this case, the relevant price for the consumer is 390.00,

depending on the desired relevance threshold.

Walmart's Pricing Strategy:

k Low Pric

Low Price

99

$297

Low Prices

Every day

They use an 0.75/.97 ending on their pricing. Again they are trying to convey a

lower price. They know that the other retailers are using $19.95, so they use $19.88.

It sounds cheaper. It looks cheaper. It is cheaper. The middle class vanished, the

cost of living has continued to increase, and people simply have less money than

they used too. In addition to that is widespread in using online shopping where

prices can be changed instantly at any time during the day. According to a 1997

study published in the Marketing Bulletin, over 90% of prices in advertising

material ended in an odd digit (9,7,5).

In using One Price Policy, Ukay- Ukay - is a combination of

factory overruns and local and imported secondhand clothing.

It is sold cheaply by vendors in ukay-ukay hubs and stores. It

is the Philippine version of thrift clothing stores. Thrift shops

have been around for such a long time and shopping from

them is a great way to support sustainable fashion while staying within budget.

What makes thrift shopping even more exciting is the fact that can score such cool,

unique pieces that probably couldn't find at the nearest fast fashion brand. This is

a great example of One Price policy since the products are sold at the same prices

whether it is different in forms.

Piso Net - A mini type internet or gaming vending machine.

It is a major hub for internet enthusiasts and children who only

have a small amount of money to surf and play some games

which more contributes "demand" to the business since it is a

"One-peso coin or other coins" for it to operate.

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In using Optimizing Markdown Decision, PureGold is an example of a company

at uses a strategic method to markdown prices of their goods to clear out space

for products more attractive to consumers, a business may reduce selling prices to

encourage bargain shoppers to buy. This also helps their business minimize losses

en products with low consumer demand. PureGold has a card wherein the can save

n the bills on water, electricity, telephone, etc. Just buy participating products to

get a coupon that can be used at the Puregold Bills Payment counter. Just buy P1000

worth of participating products to get ₱100 discount on bills. They also launched

their loyalty program, which was eventually renamed "Tindahan ni Aling Puring"

in 2004. Puregold continued its expansion at an average of 3 new stores every year

and established operations in North and South Luzon.

In using Optional Product Pricing, Cebu Pacific Airline Flight Selection is a

Philippine low-cost airline based on the grounds of Mactan-Cebu International

Airport, Lapu Lapu City, Metro Cebu, in the Philippines. It is Asia's oldest budget or

low-cost carrier airline, founded in 1988. Cebu Pacific airline used Optional Product

Pricing Strategy offering additional baggage and meal that comes with a price when

customers book a flight.

Apple Inc. is an American multinational technology company headquartered

in Cupertino, California, that designs, develops, and sells consumer electronics,

computer software, and online services. Apple Inc. used Optional Product Pricing

strategy in upselling and cross-selling upgrades or accessories for its product Pro

Display XDR as shown in the pictures.

In using Penetration Pricing and Non-Financial

HBO

Objectives, Utility Companies (Television and Internet

providers) Television and Internet providers are notorious

for their use of penetration pricing - much to the chagrin

of consumers who see massive sudden increases in their

bills. Comcast/Xfinity, for example, regularly offers low

introductory prices such as free or steeply discounted premium channels. At the

end of a specified period, the price increases. Most consumers continue paying

the higher bill, but some jump to a new provider offering an introductory rate.

Other utility providers also rely on penetration pricing. In a market increasingly

dominated by smartphones, providers of landlines may use penetration pricing

to get consumers to purchase a landline. Some even bundle these deals alongside

cable, internet, and smartphone packages.

DVD Rentals (Netflix)

A Friday night trip to a video or DVD rental shop was a family

NETFLX

tradition across the nation for at least a generation. When Netflix

entered the market, it had to convince consumers to wait a day

or two to receive their movies. To accomplish this goal, it offered

introductory subscription prices as low as a dollar. The pricing

strategy was so effective that traditional providers such as Blockbuster soon were

edged out of the market.

Food Companies (Stax)

Lays

Many new foods introduce themselves to the market with a

penetration pricing strategy. Some businesses even give packages of

new products away by, for example, sponsoring events and providing

sample packs to attendees. In one notable such example, Frito-Lay

introduced Stax to the market in 2003. The brand was a direct competitor

to the well-established Pringles line of chips. To draw more business,

the company offered the chips at a steep discount of $0.69 per canister.

This earned the brand prominent display locations at many retailers. When the

chips had fully penetrated the market, the price quickly rose to well above $1.

Penetration Pricing

Nintendo

Nintendo adopted a market-penetration pricing strategy for its

latest console, the Wii. The Wii was priced at $249.99 at launch, much

cheaper than the 360 and PS3. This pricing strategy as well as its

innovations is the main contributor to its success. It currently holds

the largest market share among its competitors. Nintendo issued only one price cut so

far, in 2009, lowering the price of the Wii to $199.

(Jacinto, J. (2010). New Product Pricing Strategies. Blogspot. Retrieved January 10, 2020,

from http://uwmktg301.blogspot.com/2010/03/new-product-pricing- strategies.html)

Penetration-Based Pricing

Walmart

Walmart has the largest market share in the retail industry, they

are having more numerous retail outlets all over the world than

anyone else. Walmart started entering into a new market to increase

market share, they used penetration pricing strategy while entering

LOW PRICES

into a new market where they found high competition. The company invested

$498

nothing in sales promotion; instead, they came up with the lowest price retail outlets

by reducing operational and stringent control on expenses. Walmart

Walmart

uses Penetration Pricing in its products, they use this occasionally in

the Quarter sale, Christmas sales, etc. That many customers grab this

opportunity.

Jiran, K. (2015). Walmart's Exhaustive Strategies market Penetration Re-

trieved From: https://www.coursehero.com/file/p41odh9/Walmarts-Exhaus-

tive-Strategies-Market-Penetration-According-to-Walmart-2013-the/)

In using Penetration Pricing and Non-Financial Objectives, here are other firms

that use penetration pricing strategy. They serve as proof that using the said strategy

will provide a great benefit to your company.

Utility Companies (Television and Internet providers)

Television and Internet providers are notorious for their use of penetration

pricing - much to the charging of consumers who see massive sudden increases

in their bills. Comcast/Xfinity, for example, regularly offers low introductory prices

such as free or steeply discounted premium channels. At the end of a specified period,

the price increases. Most consumers continue paying the higher bill, but some jump

to a new provider offering an introductory rate. Other utility providers also rely on

penetration pricing. In a market increasingly dominated by smartphones, providers

of landlines may use penetration pricing to get consumers to purchase a landline.

Some even bundle these deals alongside cable, internet, and smartphone packages.

Perceived Value Pricing

Siomai House was one of the food products offered by BERNABEST

FOOD PRODUCTS INC. that offers steamed pork and shrimp siomai,

matched with banana cum pandan flavored gulaman. Furthermore,

their siomai is served with a uniquely concocted chili-garlic sauce that

makes it more appetizing.

The pricing strategy of the Siomai House is based on their popularity and what

the target market is perceived on their product. Since Siomai House is one of the

popular food stalls because of its taste and mouth-watering flavors like chicken and

pork, the target market or customers are willing to buy their products at any cost.

Periodic Discounting

On October 18, 2019, Brownies Unlimited celebrated their 31st Birthday. Now to

give their customer a blowout, they are giving the box of 4 brownies for only ₱31.00

in which the original price is Php 85.00. This promo is limited for one person only and

can be acquired by 2:00 pm to 5:00 pm only. This type of discounting is periodic or

discounting during special events. Because Brownies Unlimited wants to be recognized

by their customer, they promoted it by giving this kind of discount to gain profit. They

lower down their price so that the customer will patronage them. When businesses are

giving a discount like this, people are driven out to buy something like this because

of the lower price offer. This may also refer to impulsive buying in which this is not
supposed to be in their budget bet because of the promo they are urged to buy.

Apple has updated its flagship smartphone this October 4th,

while dropping their prices of the two proceeding models (iPhone

4 and iPhone 3GS). By this Apple is trying to reach more price-

sensitive costumers and clear their stocks. In this particular case, Apple also

tries to lower the peak demand for their newest model as Apple has already

experienced many supply shortages due to the overwhelming demand for their

newest products

In the case of technological products, their new product cycle is generally one year.

So customers know that each year there will be another (newer and slightly different

version) phone and that the older version will be offered at a discounted price.

Note that those prices are for the devices with two years of contracts.

Compare iPhone models.

iPhone 45

IPhane 4

Phon 3G5

iPhone prices for discontinuing models

5139 1935

5299 1/C

5512 642

In using Predatory Pricing, this company is one of the examples that use predatory

pricing. They are claiming that Uber has used its ROYALTY billions of dollars in

funding to undercut competitors with predatory pricing, losing money on every UberX

andUberXL ride in San Francisco "with the expectations of reaping extraordinary

future returns." Ridesharing startup Uber has run roughshod over traditional taxi

businesses across the country. One San Francisco taxi company is now fighting back

in court. Flywheel Taxi (formerly DeSoto Cab) sued Ubert U.S. District Court.

Amazon famously barely turned a profit in its first twenty years, and even today

nearly all of its operating income comes from cloud-computing service Amazon Web
Services. To hear CEO Jeff Bezos tell it, Amazon focuses relentlessly on customer

needs, serving as a kind of charity run for the benefit of its users. Many critics have

offered a more sinister theory: Amazon has spent the past couple decades building

up market share by under pricing competitors, and someday, when there are no

alternatives left, it will become fabulously profitable. Amazon is lying in wait, in other

words, to become a monopoly. The technical term for this is predatory pricing, and.

it's illegal under U.S. antitrust laws. Dropping prices with the intent to monopolize.

STARBUCKS COFFEE

Starbucks Coffee uses fancy interiors, terms like "barista", "venti"

and "grande" as well as the use of the green mermaid are all superficial

RBU

that is added to the experience of PRESTIGE PRICING. But the thing

that made Starbucks a premium coffee brand was the price.

Coffee used to be a dollar cup. Then Starbucks started charging almost four

imes as much. Starbucks created a new category of premium coffee, one they still

dominate today and all those added features contribute to the higher price tag.

APPLE INC.

Apple strategy is based on the skimming method which means pricing the

product at a high price to get profit. But it follows this only in the introduction stage

for their products.

Apple has a multi-prolonged strategy that encompasses offering a small number

of products, focusing on the high end, priority to profits over the market share, create

such an effect of the product which makes people starve for new. The sales of Apple

have increased by 23 percent as against 46 percent for Samsung. Apple products

may still be good in quality but in many countries, it is considered expensive than

other alternatives like Samsung, Google, Amazon, and many other vendors.

(Seymour, D. (2017) "The Pricing Decision: A Strategic Planner for Marketing

Professionals" Canada. Probus Professional Pub. Page 71) (Walter, W., (2018)

"Prestige Pricing: Pros & Cons and Examples" Retrieved from: http://inevitablesteps.
com/marketing/prestige-pricing/)

Mention the brand Uniqlo 10 years ago to anyone outside of Japan and you would

get a confused look. Mention Uniqlo to any global citizen today and the associations

of quality, affordability, and fashionable come to mind immediately. That is how

successful Uniqlo has become in recent years. It has become yet another contender in

the global fast fashion retail market. Despite having to compete against other bigger

players like ZARA (Inditex), H&M, Gap, and Forever21, Uniqlo has still managed to

grow at an astounding pace. How did it manage to capture a share of this competitive

fast fashion retail market so quickly? Some of Uniqlo's key brand success factors

include its unwavering commitment to innovation and its company culture. Its

Japanese founder, Tadashi Yanai is famous for his quote "Without a soul, a company is

nothing". This soul is reflected in the 23 Management Principles that Tadashi Yanai has

created and indoctrinated in every Uniqlo employee. The essence of these principles

includes putting customers first, giving back to society, and being self-disruptive.

(Brian, L. (2019) Uniqlo - The Strategy Behind the Japanese Fast Fashion Retail

Brand. Retrieved from https://martinroll.com/resources/articles/strategy/uniqlo-

the-strategy-behind-the-globaljapanese-fast-fashion-retail-brand/)

In using Price Sensitivity, Buko Coco is one of the popular food cart businesses. It

was established to give a smooth and refreshing taste of fresh buko shakes and ready

to drink juices. Go grab one with a dash of pandan, milk, and others. It is a customer

and a service-oriented company that boasts of wide logistics nationwide. Customer

concerns are addressed promptly, and they have open communications with the

business partners and personnel. These are practices that ensure the maintenance of

the quality of the stores in every aspect including service training, operations, and

product standardization. The price of one bottle of buko loco is P35 which is the small

one and can also buy the big one which the price of P109. They offer different flavors

that customers would like such as pandan, ube, halo-halo, and others.

Buko juice is one of the best and healthy drinks. The buko juice can be drink

anytime especially during snack time. It is a good and healthy drink. Buco juice
can be prepared with so many different types of flavors, for only P10 each for the

small one and can be range up to P20 for the big one. One of the Flavor there is ube-

macapuno which is very delicious and will satisfy thirstiness.

Buko Coco is a little expensive so its demand is not that high.

Based on this product, when the price is high its demand is low.

The price of a certain product has a great effect on the demand

because most people will buy an affordable product and have a low price.

In using Price Discount and Allowance, Fast-food Chains uses also this kind of

pricing strategy which is price discounts. It may appear through their value meals

which offer any different foods at a cheaper price.

ALL HARSARE

65

15

Another example is Happiness Tummy. They offer this unlimited

all in one for Only P299.00 per head which contains unlimited

Samgyup, Nachos, Wings, Fries, and Milktea. The strategy that they

used is that, they know that not every customer can eat a lot so they

used the word "unli" to attract customers to buy their products.

In using Price Differentiation,

, it enables companies to profit from their

customers' unique valuations by offering different customers different prices for the

same product just like how the said stores are offering different types of jewelry

like rings. It is noticeable that price differentiation when it comes to jewelry just

like rings vary mostly on the customer segments or who are their target market.

Like if the target market is in the middle-lower class, people tend to buy products

that are more budget-friendly and could still be used in the long run just like what

JustGift and UniSilver are selling because they have this lower-cost but pretty items.

And the said stores also got higher prices items good for higher quality seeker

customers. They have designated prices based on who is their target market and the
items on the same class but with different specifications. The range of prices created

by differential pricing contributes to the pricing windfall with larger margins from

higher prices and growth by using discounts to sell to more customers. In Unisilver

prices of a ring, accessories range from P450 - P.1400 depending on the designs

and concentration of materials used. While on JustGift prices are quite similar to

Unisilver which also ranges from P240-P500 depending on varieties.

F&C Jewelry and Gems and Jewels have this classy look from their physical store

up to their respective items. Rings costs around a ₱5,000-P20,000 depending on the

class as they also offer not just silver accessories but also gold and other gems. It is

noticeable that jewelry shops JustGift and UniSilver have this price differentiation

strategy to reach out to lower-end customers. JustGift products are mostly made

som stainless steel and the UniSilver sells silver products. And based on the survey

lducted, their stores can be located at places or malls with a vast number of lower-

ed customers to place their products. They offer different varieties of jewelry that

wre much more affordable products to be sold in the market. Meanwhile, the F&C

Jewelry which is located at the SM Department store Jewelry section sells high-end

old rings with different karat concentrations. Their target market is obviously for

the higher end customers as their prices are quite expensive and meant for lavish.

Same goes with the Gems and Jewels that sells gold pieces of jewelry with different

karat concentration where they also based their pricing strategy.

In using Prestige Pricing, Nike is a perfect example of a company that effectively

uses prestige pricing, which is a pricing strategy where prices are set higher than

normal because lower prices will hurt sales. If customers value the image of the brand

and the features of the product over those of the competitors, then prestige pricing

(also known as image pricing) can help capture value despite the production costs or

quality of the product.

The theory is that customers will pay higher prices for the right image and won't

investigate whether the price accurately reflects the value. In Nike's case, the brand is

what communicates value, not the specific nature of the product. Prestige pricing can
give companies a psychological marketing advantage by convincing customers there

is added value for the cost, and it takes advantage of the buyer's assumption that one

brand's product is of a higher quality than the competitors because it costs more.

The decision-makers in the company pursue prestige pricing which is a strategy

that allows them to appear as though a premium brand selling premium products. In

some cases, brands that pursue this strategy are truly superior to their competitors.

Usually, however, the level of the quality difference between the premium brands and

the others doesn't reflect the difference in their prices. Rather, even if the products are

similar, prestige prices are significantly higher than the market average. Not for all,

but prestige pricing might be the best strategy for at least some of the other products.

Pricing Bundling

On the other hand, It is said that fast-food restaurants are also

engaged in bundle pricing quite frequently. They may call it a

value meal or a meal deal. A customer can purchase a sandwich,

fries, and a drink as a value meal for far less than the price of

purchasing each item separately. One of the well-known fast-

food restaurants here in the country who apply pricing bundling as their pricing

strategy was the Mc Donald's, who offered the McChicken, McDouble sandwiches,

McSpaghetti, McBurger fries, and drinks.

McDonald's pricing strategy involves price bundling combined with

psychological pricing. In price bundling, the company offers meals and other product

bundles for a discount. Some of the meal was called a 'Happy meal' for kids who has

food and toy as well that captured the interest of the children. While there is what

we called a 'Budget Meal' for those who have a small budget yet wants to have a

two or more meal in one plate. And lastly the 'Bucket Meal' was a big set of meals

that is good for sharing or good for a family who likes different meals at one price

In psychological pricing, McDonald's uses prices that appear to be significantly

more affordable, such as $99.99 instead of rounding it off to the nearest dollar. This

element of McDonald's marketing mix highlights the importance of price bundling

to encourage customers to buy more products.

McDonald's itself is vague about its pricing strategy; the company understands

that a customer's perception of value is an important determinant of price

charged. Using low price as a marketing tool may promise customers a product of

compromised quality. Moreover, competitors can respond in a price war resulting

in profit margins reduced without increasing sales.

In using Price Cues, Fariñas Ilocos Empanada is a favorite for many of us.

Their store is serving up hot and crispy savory pies filled with miki noodles, mung

bean sprouts, fried egg, bagnet, and longganisa for dine-in and take-out. Their

empanadas are a regular best-seller. One can choose anything from an ordinary

empanada, containing an egg and mung bean sprouts, for P45 to an ultimate

empanada with everything in it for P99. One can also opt to add cheese for an

additional P10. Each empanada is cooked upon order, ready to eat in about five

minutes and the empanadas are delicious and perfectly cooked.

Mama Dang's Empanada is one of the best and delicious empanada. The

empanadas can be eaten for breakfast, lunch, and dinner. They can be served as

appetizers or snacks, but they can also easily make a full and satisfying meal. It is a

very versatile dish. These delicious bundles can be prepared with so many different

types of fillings, for only P49 each. One of the fillings there is the cheese flavor or filling

that is very delicious and will satisfy your cravings.

MAMA DANG'S *

EMPANADA

Those two are both business that has a product specialty which is empanadas,

however, when we will talk about the prices of product they do not have the same

amount of prices though they have same pricing strategy and a goal of to have an

income or profit. Farinas Ilocos Empanada has a cheaper price compare to Mama

Dang's Empanada, one factor that can be considered is the location of the business,

I can say that it is much comfortable at Mama Dang's Empanada place. The Price of

Mama Dang's Empanada will be much cheaper if ordered many because they accepted
boxes of order compare to Farinas Ilocos Empanada they do not offer or have a box for

their orders because they most likely sell it per piece.

In using Pricing Discrimination, each flight the

passengers have paid different prices, and that in some

cases can observe that the highest price is as much as

Philippine Airlines

five times the lowest price. Is price discrimination a good or bad thing for airline

passengers and society? To answer such a question, one must focus on the price

discrimination that is most common in this industry. A casual observation would

be that there are numerous different versions of an airline ticket to choose from.

One can buy an expensive, flexible ticket. Then one allowed to reschedule the

flight or even cancel it without any costs. Or can buy a cheap ticket, with many

restrictions. For example, a Saturday night stay-over is required and so is advance-

purchase. Since every passenger can choose between different versions of an air

ticket, it is natural to consider the theory of versioning when analyzing the price

discrimination in this industry.

Price Elasticity

The Apple brand already made an established image in the market that the

consumers patronized their product and they have already gained the trust of the

consumer. It is a strong brand that many consumers are willing to pay a premium

for an Apple product.

509

699

*999

1099

For example:

If the Apple Company has a price of 30,000 in a certain apple product and

increases the price by 50% which is 45,000 and there is a small fall or decrease in

the percentage of demand by 10%.

Using the formula:

Price Elasticity of Demand (PED) =% Change in Quantity Demanded

% Change in Price

PED =

50%

10%

0.2

If the result is less than one or equal to one, it is inelastic. The demand for

the Apple Brand is price inelastic. Meaning, Inelasticity of a product is the

responsiveness of the consumer's willingness to pay the price even if the price

increases. The Apple product is Inelastic and even if they increase the price the

consumers will still buy the product at any price and there will be a small decrease

in the percentage of the demand towards the Apple products even though there

is an alternative phone that makes the product elastic, the consumers are still

willing to pay the price at any cost just to have an Apple product that makes the

product inelastic. We say a good or product is price inelastic when an increase in

price causes a smaller % fall in demand.

Other examples:

Salt - If the price of salt increased, demand would largely be

unchanged. It is only a small % of income and people tend to buy

infrequently. It is good with no real substitutes at all.

Meralco - A good produce by a monopoly is likely to be

inelastic demand. This is due to the demand will remain there and

no alternative or choice to purchase or pay for the price even if it

MERALCO

increases

In using "Price Elastic Demand". ELASTIC DEMAND, SHELL PETROL

For example:

If the price of diesel increases by 20% and there is a great or huge fall in the
percentage of demand by 50%.

Using the formula:

Price Elasticity of Demand (PED) =% Change in Quantity Demanded

% Change in Price

PED =

50%

20%

2.5

If the result is greater than 1 it is elastic. The demand

for Shell products such as diesel is price elastic. Meaning the

elasticity of the product is elastic that not all the consumers

will still buy at shell because of the price increases. Based

on the PED, the Shell product, which is diesel is elastic, meaning, there are still

alternatives than buying at Shell, like Caltex, Flying V, Petron and so much more

that offers the same product that Shell has that causes huge fall in the percentage of

demand. Price elastic when an increase in prices causes a bigger % fall in demand.

The only exception is if a petrol station has a local monopoly - e.g. at the service

station on the motorway, there is a captive audience. But, in a city center with

many alternatives, people will have an elastic demand.

Other examples:

Porsche sports car - If a Porsche increases in price,

demand will probably be elastic because it is a high % of

income, and so the higher price will put people off. Also,

there are other alternatives, such as Jaguar or Aston Martin.

at

Kit Kat chocolate bar - If Kit Kats increases, people will switch

to alternative types of the chocolate bar.

In using "Price Expectation", Apple forecast tops estimates on

expectations consumers will snap up iPhones, wear

wearable devices.

Apple projected sales that beat analysts' estimates, suggesting consumers

continue to snap up the company's high-end iPhones, digital services, and wearable

devices like Air Pods and the Apple Watch.

Apple shares rose 2.4 percent in extended trading on Tuesday. The stock closed

at US$190.29 in New York and has gained 12 percent this year, moving Apple closer

to becoming the first US Company with US$1 trillion in market value.

More than a decade after its debut, the iPhone is still Apple's most-important

product, accounting for about 60 percent of revenue. While unit sales have slowed

recently, the company is building digital services and a suite of other gadgets

around the device. Those newer businesses, along with higher iPhone prices, have

supported revenue growth.

iPhone 6

Phons 7

#349

1449

1549

*699

999

Apple's fiscal fourth-quarter outlook is closely watched because this is usually

the period when the company unveils new iPhones. The company is expected to

launch three new phones later this year. That's raised Wall Street expectations for

more sales and profit.

The results "were driven by continued strong sales of iPhone, Services, and

Wearables, and we are very excited about the products and services in our pipeline",

Tim Cook, Apple's chief executive said in a statement.

More than a decade, Apple still manages its image as the world's leader in terms of

making smartphones. Apple still reigns as the Rolls Royce when it comes to gadgets.

As we all know that most of the Company's offers are so high end, so we are expecting
that the prices are high. But the question is? How Apple still manage its stability as a

company and its images of being world-class? The price expectation of every customer

and user in the whole world about the iPhone is costing high, but they know that this

phone is offering world-class in all its specs. That's why many people around the

globe are still patronizing this smartphone because they believed that their money will

not be wasted even though it is costly when they buy this smartphone.

In using Price Fixing, Unilever is a British-Dutch transnational consumer goods

companyco-headquarteredinLondon, United Kingdom,andRotterdom,Netherlands.

Its products include food and beverages, cleaning agents, beauty products, and

personal care products. It is Europe's seventh most valuable company.

This product contains the same intension for all us to maintain our clothes look good

and smells good they have their scents and fabric. The given SRP for us to remember

that the price is fixed and it tells me that it is the original price of the product. The

following are the original price First is the SURF POWDER DETERGENT given (SRP

is P5) Second is TIDE POWER DETERGENT (SRP is P6) lastly is ARIEL POWDER

DETERGENT given (SRP is P7.50). All these three detergent powder like a Tide, Surf,

and Ariel infuse your clothes for a brilliant clean and freshness, with burst after burst

of uplifting fragrance. The same amount of 50 to 70grams each of sachet and its price

are somehow so far and some are a well-known brand. I realize although Surf is the

smallest sachet it does have the most sales and brand awareness due to the different

variety of choices and also the Ariel one because of its quality and price. It can't be sold

like Tide and Surf because Ariel is too expensive for the quality.

The Surf and Tide powder detergent seem to be competitive at the pricing set

Surf powder sold for P5 and Tide for only P6 Tide and Surf SRP are affordable. Surf

has a promo of a bulk or a dozen and one free sachet for each dozen for only P58.

The idea of giving discounts and promos is to easily attract and get the attention of

the customer to have more sales.

Tide

Dacon
In using Price Leadership, many firms use price leadership to gain

more profit and to gain more market share. This control can leave the

leading firm's rivals with little choice but to follow its lead and match

the prices if they are to hold on to their market share. Price leadership is common in

oligopolies, such as the airline industry, in which a dominant company sets the prices

and other airlines feel compelled to adjust their prices to match.

Picture City that was discussed earlier, Bajaj Auto

is one of the best examples in Price Leadership. It is an

Indian-based company which is known in their auto

2020

wheels. In India, they have taken the risk to be the price

leader in the motor industry and look at now even in

other countries like the Philippines which is very popular as well. Bajaj Auto has also

led the pioneering introduction of India's first-ever Quadricycle - Qute. Bajaj Auto

exports to 70+ countries and a significant share of revenues come from Exports. This

stands as a testament to the new brand image - The World's Favorite Indian. In 2007,

Bajaj Auto acquired a 14% stake in KTM that has since grown to 48%. This partnership

lyzed Bajaj Auto s endeavor to democratize motorcycle racing in India. Bajaj Auto

todadwide. In FY2018, KTM was the fastest-growing motorcycle brand in the country.

exclusively

manufactures the Duke range of KTM bikes and exports them

THE WORLD'S

FAVOURITE

INDIAN

In using Price Lining, Apple creates different price points for their price lining

strategy according to the models that they're offering. For example to this is, Apple

offers three latest models which are iPhone 8, iPhone 8 plus, and iPhone X. Each of

these phones has different features. The iPhone 8 is the handiest of all, the iPhone

3Plus is bigger and comes with the dual camera feature and lastly, iPhone X is the
anniversary phone and the most unique of them all and has the most powerful

camera. Here's how Apple using the price lining. Each phone is priced according to its

features. An iPhone 8 starts P30,990 where iPhone 8 plus starts P36,990. The iPhone X

has higher prices which are starts from P56,556 since it is the best phone and has the

best unique features. The idea behind these prices is to create interest to the consumers

who will notice those gaps between the prices, features, and the quality of the product.

Another example of companies that uses the price lining is offering the internet.

Globe, Royal Cable, etc are offering different internet connection features such as

3mbps, 8 Mbps, 12 Mbps, and the higher Mbps is 50mbps. These internet plans based

on their specification are being priced based on their features. The higher the Mbps

you get the higher the price you will pay because it has the best features that they

offer. Consumers are giving an option based on their capability and the required

budget they have. Most of the companies are doing this kind of strategy like Apple,

In using Price-Offs, many customers believe that Amazon offers at or near

the lowest prices on a broad range of goods, even when that's not the case.

Amazon strategically selects the products, such as best-selling items, on which

to compete aggressively and charges relatively more on others. In one study, Jet.

com was cheaper than Amazon by 27%. Intense competition on pricing pervades

many industries, which makes consumer perception more important than ever.

Aggregator and comparison websites have brought greater price visibility and ease

of product comparison to banking, insurance, hotels, and other consumer markets.

It's also easier for consumers to split their spending among different providers,

depending on which firms offer the best perceived price-value equation. Managing

price perception, not just pricing structure and actual price points, thus has become

a critical capability for firms in consumer markets. Many people think Amazon is

the cheapest place to buy any products. That's why the company has nearly half of

the US e-commerce market share. But that suggestion is not accurate. Amazon offers

the best deals for the most popular products, but for the rest, it's a different story.

The real success is forming a perception in shoppers' minds that the website is the
cheapest destination for any product.

(Saricayir, B., & Basak. (2019, December 25). Price Perception: Directing & Influencing

Consumers.Retrieved from https://prisync.com/blog/price-perception/)

The price of running shoes from different brands vary. Running shoes from

branded stores at SM City Santa Rosa are somewhat pricey and costly. However, some

retail stores are offering first-class or class running shoes at low prices. Examples of

sales, discounts, and price-offs are evident in a retail store in Royal Kicks at Barangay

Canlalay, City of Binan, Laguna. They offer the same brand of shoes at affordable

and low cost. For Nike running shoes, it can be usually bought of SM City at a price

of P6,900. When purchased in retail stores like Royal Store in Canlalay, this can be

purchased at P1,999. It is relatively cheaper than the ones in SM Store.

In using Price Quality Positioning Matrix,

McDonald's Pie

APPLE PIE

RICH

CHOCOLATE

PIE

McDonald's pie has been on the chain's menu for 50 years, so it's pretty safe

to say that it is a beloved dessert and is made with a tender, flaky lattice-top crust

with a sprinkled sugar topping. The average price of each pie cost P35 but when

McDonald's releases chocolate pie, it immediately increases up to ₱50.

Utility Companies

Television and Internet providers are notorious for their use of penetration

pricing - much to the consumers who see massive sudden increases in their bills.

Comcast/Xfinity, for example, regularly offers low introductory prices such as free

or steeply discounted premium channels. At the end of a specified period, the price

increases. Most consumers continue paying the higher bill, but some jump to a

new provider offering an introductory rate.

Globe Telecom WiFi

It was stated that "the Globe At Home Prepaid WiFi is a new

product that offers budget-friendly internet access at home, giving

you 2X faster speed*, 2X stronger signal and wider coverage* with

no installation required and no monthly fees needed".

Gobr ATHOME

Most likely the companies with giveaways and buy-one, get-one sales encourage

sumers to spend more money than they otherwise would. These sales can also be

example of penetration pricing. Manufacturers may contract with merchants to

ffer a new product for free with the purchase of a related product. The manufacturer

tomporarily loses money but does so in the hopes of creating interest in the new

roduct. Comcast Cable is one of the United States' largest video, high-speed

Internet, and phone providers to residential customers under the XFINITY brand,

ond also provides these services to businesses; this corporation practice penetration

pricing for example, regularly offers low introductory prices such as free or steeply

discounted premium channels. At the end of a specified period, the price increases.

xfinity

Price-Quality Inferences

Cite other firms who did the same pricing strategy (show pictures of the product)

or existing best practices of the company

Others firms that use Pricing for market penetration are:

*Smartphone providers like

Oppo

OPPO F5

In using

Price Taker, SM Investments

Corporation (SMIC), also known as SM Group, is a

P4,950 -

Philippine conglomerate with interests in shopping

Used : P7,000-
mall development and management, retail, real

4.1 30 reviews

estate development, banking, and tourism. The

company is also selling carrots and other vegetables in their supermarket however

it is much higher than what the product is worth. However, many consumers buy

it because they think that it is the real value of the product the same with their other

product. The company is reselling a different kind of product in its markup but still

somehow not too much higher in the prevailing market price to avoid conflicts. And

to that, they are using a value-based product which makes the consumer believe that

their pricing is the real worth of the product they are buying. Value-based pricing

is a strategy of setting prices primarily based on a consumer's perceived value of a

product or service. Value pricing is customer-focused pricing, meaning companies

base their pricing on how much the customer believes a product is worth. Value-based

pricing is different than "cost-plus" pricing, which factors the costs of production

into the pricing calculation. Companies that offer unique or highly valuable features

or services are better positioned to take advantage of the value pricing model than

companies that chiefly sell commoditized items. It is the best pricing strategy for this

kind of product because since the supplier of the product is the price taker they have

no choice but to accept the prevailing market price. However, the reseller can mark

up his/her price in which the people will think that it is truly the price value of the

product not knowing that the seller bought it at a much cheaper price because some

of us does not know what is the prevailing price of the product we are buying and

the Value-based pricing strategy will be effective as long as the consumer believes

that the company's pricing is the product truly worth.

CURAO

In using Price Transparency, many products have these kinds of situations

also. Same usage with different styles, designs, materials, quality, and performance.

One example of this is the burger. Burgers tend to have different prices because
of its ingredients and how it is made. Mcdonald's and Angel's burgers have a few

dissimilarities in terms of ingredients used, the procedure of cooking, and the

ambiance of the store. Mcdonald's have more components such as lettuce, pickles,

tomatoes, dressings, onions, and of course, the well-heated buns and 100% beef

patty. While in Angel's burger, the burger has few components. The burger consists

of typical buns heated in the same pan where the patty is cooked making it greasy

and oily, mixed with mayonnaise and ketchup dressing and thin patty. It is the

same for the ambiance of the store. McDonald's provides a big space with tables and

chairs for dine-in customers while Angel's burger has few chairs in the counter of

the stall and it can also be seen in roadsides and busy areas outside such as markets.

In using Pricing Optimization Software, one of the

companies that also use Pricing optimization is Marithe +

Francois Girbaud and international apparel, wallet, and bags

brand. Last month they offer to buy 1 take 2 to all items here,

but they are doing it every year. Since every month, the year

is holiday season they taught of how they will optimize the prices of their product

while emptying their inventory and having a great revenue. By gathering information

considering the season, customer demand, and the supply that they have, the offer

eventually tops up their sales and got rid of the items that will be paced out.

In using Pricing Escalation, Togum Agricultural

Development Company, Inc. (TADECO), one of the

highest yielding banana plantations in the world, is

engaged in the production and export of fresh Cavendish

bananas to Japan, Hong Kong, China, Korea, Middle

East, Russia, Malaysia, and Singapore under the Del

Monte Brand name. It is the flagship company of the

ANFLOCOR Group of companies. With more than 40 years in banana operations,

TADECO has maintained its world-class quality bananas following stringent