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Pricing Methods in Marketing Strategies


Pricing is an important concept in the marketing strategy of any firm seeking to maximize profits. The price of a commodity determines, to a large extent, the stock turnover of that particular commodity. In the event that a poor pricing model is selected, the repercussions could be grave on the sales volume. A careful analysis of a product is therefore a prerequisite before a particular pricing model is adopted. The analysis in question should encompass all facets of the product. It should include the type of the product, the output from the production line, sales expectations, and the position of the product in the product life cycle among others. It has been estimated that a myriad firms perform poorly in their markets courtesy of their improper pricing strategies.

4VOO is entering Singapore, an apparently new but emerging market for cosmetics. It therefore seeks to adopt a pricing strategy that will ensure the products penetrate and capture the market effectively within a reasonable time frame. The following pricing methods are therefore suggested. This is taken in consideration of the type of the product i.e. cosmetics that may not be receptive as such in a new market.

Perceived Value pricing

The company can adopt the perceived value pricing as a method of pricing for the company’s cosmetics. This is whereby the price is determined by gauging the perceived value that the clients will obtain from the company’s products (Gladwel, 2003). Such a pricing model will only be adopted after the company has really conducted a thorough market research to determine the satisfaction that the clients might obtain from the cosmetics. Price by the perceived value method is determined by engaging the potential customers as to what they may be willing to pay for the product. This is achieved by conducting a study by the use of questionnaires or interviews. The pricing method is quite important as it will enable the company charge the appropriate price for the cosmetics and hence lead the market.

Value pricing

Value pricing involves the charging of low prices in the market so as to increase the volume of sales and gain the market lead within a short time. The company can adopt such a pricing model in the market by selling their cosmetics at lower prices than the conventional market prices. Low prices will help in attracting even the low income earners considering that Singapore has so many low incomes earners. Many firms have managed to capture markets by charging low prices for quality products. The company can therefore distinguish itself as a low cost supplier of quality cosmetics in the market. This will enable it to drive away most competitors out of the market within a short time frame. It has been shown that value pricing is one of the most profitable pricing methods as it enables the buyers to obtain the highest utility possible for what they pay. The buyers will normally be comfortable with such a price because it enables them to save a lot.

Price adaptation Strategies

Promotional Pricing

Promotional pricing is a price adaptation strategy where the marketers seek to adopt every possible strategy to ensure the product succeeds in the market (Swisher, 1998). For instance, “the buy-one get-one free” strategy is adopted. Promotional pricing is very crucial especially in a new market. The 4VOO company can therefore adopt such a method to penetrate the market in the new Singapore market. For instance, by offering say 20 per cent discount during off- peak seasons, it will really attract new customers. This will also ensure that such users stick to the products irrespective of whether the promotional services are offered or not. The fact that the products in question are cosmetics will also help to boost their acceptance in the market given that people normally tend to use a single brand of cosmetics for a long time frame. It will be realized that promotional pricing will really help to increase the revenue within a very short time frame.

Geographical adaptation

The Company can use various price adaptation strategies such as the geographical adaptation strategy. This is where the company will set different prices for different geographical regions. This can be attributed to the fact that different areas may vary in terms of the social status of the people living in such areas. It has been demonstrated that many firms have managed to capture markets by using the geographical pricing adaptation techniques (Creig, 2005). This is the approach by which many multinationals enter new foreign markets. Geographical pricing can also be adopted as a result of the different costs of transporting goods to different locations. Singapore being a vast area it implies that such costs will be different hence the need to set different prices.

Distribution channel

The distribution channel that a product marketer adapts to a large extent determines the success, the availability and consequently the success of that particular product in the market. Research has shown that the impact of certain products is never felt in most markets due to the poor distribution channels adopted (Graham, 2001). As a result there is a need to study a particular product keenly prior to designing the distribution channel.

The company can locate an agent in Singapore who will be in charge of all the supplies in Singapore. The agent will be receiving the cosmetics in bulk and supplying to different retailers in Singapore who will then sell them to the consumers. This will help the company in mitigating the costs associated with a long distribution channel. It will also enable the products to reach the market faster.

Alternatively the company may adopt the direct marketing or zero level marketing. Here, the 4VOO company will establish outlets in Singapore from where they sell their cosmetics directly to the consumers. Though costly and procedural, the zero-channel normally enables the producers to monitor the sales of their products and improve them as required.


Creig, R. (2005). Marketing Strategies In The New Century. New York: Bantam Books.

Gladwel, J. (2003). Marketing Strategies. Auckland: Oxford University Press.

Graham, J. (2001). Advertising. Cambridge: Cambridge University Press.

Swisher, G. (1998). The Art of Pricing: A Modern Approach. New York: Paragon Books.