RSM250H1 Lecture Notes - Lecture 6: Price Ceiling, Price Floor, Marketing Strategy
19 Feb 2017
School
Department
Course
Professor
Document Summary
Why is pricing so difficult to manage: the value chain: Influences on pricing from retailer and manufacturer: retailer perspective and power. Driver their private label penetration/market share: millions of consumer purchases weekly. Consumer sees what the averages prices are in their region. Have to understand who is purchasing products and why, where and when they purchase and what prices they see. 5w"s: point of sale data, consumer loyalty program data. Step 1) retailer and manufacturer must form a partnership of trust, and pursue pricing optimization. 3 types of summarized/compact user groups: regular/loyal 7-10 times out of 10 purchase cycles, semi-regular/switchers 4-6 times out of 10 purchase cycles, occasional/infrequent 1-3 times out of 10 purchase cycles. Step 3) using pos data, find what, when and where. Step 4) build financial model: pro forma p&l. Understand your brand better, working with customer to understand needs. Customer perceptions of value: price ceiling no demand above this price.
