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Advantages and disadvantages of price discrimination
Advantages and disadvantages of price discrimination
Price discrimination pros and cons
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It is really interesting how David Pakman says, "the big guys are overcharging you, while smaller companies like ours (Dollar Shave Club) can give you the best products in the world for a fraction of the price." Price is what the customer are willing to pay, and it is the biggest indicator of quality. We immediately think that higher price is better and has good quality. When in reality it sometimes doesn't. For instance, a person tastes two of the same wines, but with different costs, one cost $10 and the other cost $40. The brain immediately distinguishes the wine as cheap (with no quality) vs expensive (with quality). When in fact they are made the same. However, it all depends on the person. Some people only buy things that are branded
Nordstrom and Nordstrom Rack are different retail operations in terms of their choice, pricing, store service, and store atmosphere customer intimate firms, which excel in serving the specific needs of the individual customer well. There is less emphasis on efficiency, which is sacrificed for giving more precisely what is wanted by the customer. Reliability is also stressed. Nordstrom is an example of this discipline. Nordstrom must meet some standards of cost-effectiveness. When customers evaluate the quality of a product, they commonly measure it against two kinds of attributes: those related to quality as excellence and those related to the quality of reliability. From a quality as excellence perspective, the important qualities are things such as a product’s design and styling, its aesthetic appeal, its features and functions, the level of service associated with the delivery of the product,
We are all consumers, and we buy diverse products every day. But, do you know what the main factor is that influences us to choose a product? If someone selects a cloth, maybe he pays attention to its quality! Customers’ decisions can be changed depending on what the main factors they are looking at. Various influences can cause consumers to select different products.
Many people start his or her day with a cup of coffee. Coffee franchisees are growing around the world with coffee being one of the most popular drinks. A Colombia franchisee Juan Valdez is a growing franchisee in the United States specializing in coffee.
This psychology of brand tribes explains why consumers choose the more expensive name brand compared to the off-brand that could very well be the same product with the same experience. Coca-Cola sold the youth lifestyle of peace and acceptance in the 60s. Disney understood that they were selling the American dream and a place for families that was a real-life utopia. Ikea’s brand idea is democracy in that consumers can put together their own furniture. Starbucks has branded themselves as a community center. Most young consumers go to Starbucks to meet up with a friend or relative, do homework, and simply hang out and use the free, reliable wifi; the coffee is just a byproduct. Companies have furthered their success by paying celebrities to model their clothes until they are such a household name where they no longer need to advertise to achieve success. Companies like Coca-Cola don’t need to tell consumers about their refreshing soft drink for most people already know, instead, they market the experience and life-changing moment of drinking their
Coffee, one of the world’s most known beverages. Seen being drinking at work places, colleges, or in the convenience of your own home. There are a variety of companies that provide us the people with coffee. It can be your local market, bakeries, or even fast food places. 3 places that stand out and our known very well for supplying Americans with coffee is Starbucks, Dunkin Donuts, and McDonald’s. From their strategic advertising, deals, and even straight down to the design of their cups, they meet the definition of marketing. We will be examining these 3 companies using the marketing mix which consist of product, price, place, promotion and also cover value based marketing and see how these companies meet these definitions and how they satisfy their customers as well.
Threat of substitutes in market as best quality is not always a priority for some customers as they are price sensitive.
High quality products which translates into low cost of ownership over the entire life
A customer’s response falls in two categories, judgment and feelings. Consumers are constantly making judgments about a brand. These judgments fall into four categories: quality, credibility, consideration, and superiority (Keller, 2001). Customers judge a brand based on its actual and perceived quality, and customers judge credibility using the perception of the company’s expertise, trustworthiness, and likability. To what extent is the brand seen as “competent, innovative, and a market leader,” “dependable and sensitive to the interest of customers,” and “fun, interesting, and worth spending time with” (Keller,
Howard Shultz and the senior management at Starbucks have to decide how to react to the opportunities that are being made available because of their rapid growth. The decision for a strategic growth plan has to be made in the near future. This will prove to be key for Starbucks reaching their long-term goal of becoming the most recognized and respected brand of coffee in the world.
Compare the globalization approaches of Starbucks & McDonalds The parameters to be used for this comparison are:
When comparing prices, consumers can find the exact same style Nike boot in Adidas and pay a lower price. Essentially what the consumer is paying extra for is the Nike brand. Looking back at my journal you can see I wore the Adidas boots one time, then went out and bought Nike boots. “Brand loyalty is based on an emotional connection toward the brand and a conscious commitment to find this brand each time the consumer purchases from this category.” 112 Brand Promotion I could have worn the Adidas boots for free but I spent the time and money to go purchase the Nike brand. “brand loyalty and advertising work together to create another important economic effect related to pricing flexibility and profits. When consumers are brand loyal, they are generally less sensitive to price increases for the brand.” 45 Advertising and Integrated Brand Promotion Being able to raise prices but still keep the consumer market is very valuable. This is one of the main reasons brands strive to have brand loyal
Preliminary Starbucks – one of the fastest growing companies in the US and in the world - has built its position on the market by connecting with its customers, and creating a “third place” beside home and work, where people can relax and enjoy themselves. It was the motto of Starbucks’ owner Howard Schultz and, mostly thanks to his philosophy, the company has become the biggest coffee drink retailer in the world. However, within the new customer satisfaction report, there are shown some concerns, that the company has lost the connection with customers and it must be taken some steps to help Starbucks to go back on the right path regarding customer satisfaction. I will briefly summarize and examine issues facing Starbucks. Starting from there, I will pick the most important issue and study it from different positions.
One of the biggest controversies at the end of last year was the choice for Starbucks to change their signature holiday cups from the normally ornamented “Merry Christmas!” designs, to a more minimalistic one of just a red cup. Outraged at such a slight, people took to social media as their outlet, angrily writing about how ‘political correctness’ had taken ahold of their holiday joy and spoiled it. Even Donald Trump weighed in on the subject, quoting in one of his debates, “I think the big problem this country has is being politically correct.” The term ‘political correctness’ has been repeated often in the last few years, especially with current events and the presidential election coming up to make the term more relevant.
Price Based Theories - This first theory focuses on the classification and study of the quality price relationship. And this led to the initial conceptualization of value as a cognitive tradeoff between perceptions of quality and sacrifice. As per this view the external ques influence product quality and value. Various instances so offered by Agarwal and Teas (2001, 2002, 2004); Dodds and Monroe (1985); Dodds et al. (1991); Grewal et al. (1998a); Li et al. (1994); Monroe (1979, 1990); Monroe and Chapman (1987); Monroe and Krishnan (1985); Oh (2003); Teas and Agarwal (2000); Wood and Scheer (1996) state the importance of price which does a bearing on the marketability of a