Brand Management Assignment2 Managing Price Discounting and its Essay

Brand Management Assignment2 Managing Price Discounting and its possible impact on Brand Equity - Essay ExamplePrice is the component of the marketing mix that has been subjected to the most intensive analysis -- particularly by economists. But as an aspect of the mix, it shtupnot be divorced from other ingredients. It must stop and reflect them. Optimal bells cannot be established, and pricing re master(prenominal)s an art with a host of factors to be evaluated for which there are no precise measures and weights.Price discounting is the main strategy used by managers to attract customers and popularize a product. Consumers do not respond to price discount alone they respond to value. A light price does not necessarily mean expanded sales. Moreover, marketing activities influence price. For example, governmental agencies have investigated advertising as a cause of higher prices. In microeconomic theory it has received great attention in marketing, the significance of price varie s among industries, competitive situations, and products (Baker, 2006). Pricing is significant where the market impact, profit results, or both, of price variations is great, and where firms have considerable discretion over the prices charged. In many instances pricing decisions are severely constrained and are sometimes relatively unimportant. Large purchasers of industrial goods, for instance, may specify prices at which they will buy, determine product specifications, and send specifications to suppliers for competitive bids (Philips, 2005). For other products price may not be a relevant factor. In some technical areas where products require much research and development and take aim much uncertainty, a cost-plus scheme may be used. In other situations, sellers may be almost completely free to set prices, while in still others, they may only be able to check whether or not to sell at a price. In an delivery of scarcity, price is accorded more attention than any other marketin g factor. In an economy of abundance, non-price factors assume increasing marketing importance and products are differentiated on other bases than price (Marn et al 2004). Price Discounts and Marketing ObjectivesThe main considerations for pricing discounts decisions involve market objectives and organizational considerations, costs and marketing mix strategies. Also, it is important to take into account market demands and psychographic characteristics of the target audience, competitors prices and market position of the company. Pricing is a crude and complex decision area affecting sales, costs, and profits for both industrial and consumer goods. For consumers, price reductions and increases have symbolic meanings. A customer may associate a price reduction with a reduction in quality, the anticipation of new models, or even lower prices or poor market acceptance (Philips, 2005). high prices may indicate better quality, a good image, and good value. Customer perceptions of price are important. Whereas pricing is usually perceived as a short action, its implications can be long-run, even to the point of shaping industry structures. Markets that may be viewed as systems of information on cost and demand determine the justness of prices (Marn et al 2004). They contain signals that businessmen must decode. But market information is ambiguous, fragmentary, and imperfect it contains much uncertainty and is interpreted differently by various executives. To those who can read the signals properly, increased