In order for any product to be successful and profitable, the price must be right. It must be affordable for consumers to purchase, and the price must allow for some profit to keep the business going. One large factor in pricing is how much it costs to make it. Price must cover the costs of production and of supplies. Pricing a product must also consider the demand of the product, which will determine how much is needed and how long it will stay on the shelf; the price of companion products; the prices of competition; flexibility in pricing; which allows for discounts and allowances; and geographic considerations. For Head and Shoulders, demographics plays a key role in determining price, as not everyone has dandruff. In certain areas, where the demand is less, Head and Shoulders should be priced lower since demand is less. In areas where the demand is higher as more people need to treat dandruff, then prices should be higher, due to higher demand.
Fine tuning pricing details can be found in shelf life; obtaining reports from stores as to how long product remains on the shelf and the average price they sell for can help to fine tune pricing. This data should also consider how much a single customer purchases at one time during sale prices. These consumers may be stocking up when on sale. A more competitive everyday price could minimize these spikes in purchases during sales.
Use your promo and get a custom paper on
"Setting the Right Price".
CRM and Social Media
In the age of the internet, customer relationship management requires less effort. Proctor and Gamble could implement a CRM initiative by asking customer to submit before and after photos, and offering testimony to the products. There will be some good feedback and some bad, but P&G could contact those customers, find out what happened and work on altering those products to accommodate everyone. They may not be aware of side effects, and those effects could be widespread. By taking into consideration the consumer’s point of view, P&G can increase its reliability and credibility to its consumers.
Social media is the ideal medium for public CRM campaigns. A strong presence on Facebook, Twitter, and Instagram lends transparency and allows for consumers to interact. Coupons, new product announcements, and details on ways to treat dandruff are just a few of the ways people and P&G can get the word out on the product.
- Becker, J.U., Greve, G., & Albers, S. (2010). Left behind expectations: How to prevent CRM implementation from failing. New Strategies, 2(2), 34-41.
- Ta’eed, C. (2012). Nine factors to consider when determining your price. [online] Retrieved from http://freelanceswitch.com/money/nine-factors-to-consider-when-determining-your-price/. [Accessed 9 June 2013]
