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How to Define Pricing in Marketing For Small To Medium Sized Businesses? 💰

Pricing and marketing – whether online or offline – are the greatest source of profitable revenue growth for the majority of small businesses and a sustainable source of value capture for large businesses.  But still, many business owners ask: how do we define pricing in marketing?

 

Pricing strategy for your small business will set the standard for your product or service in the marketplace and is an important aspect of both your bottom line and your competitive edge. Early in the life of your small business, for example, you really want to attract and maintain your intended market as deeply as possible, and pay close attention to what they value most and any past fluctuations in competition and demand.

 

For those who are unfamiliar with pricing: The pricing you charge customers is a vital component in the marketing mix accounts and the number one driver of profitable revenue growth that the business creates. In simple terms, you need to set your prices according to what your customers value the most about your brand.

 

In summary, then the price is more than a number. A price is the summation of the total of all the financial, physical and psychological benefits of your offer to customers like money, energy, time, and mental costs.

 


Table of Contents:

I. How to Define Pricing in Marketing for Small to Medium-sized Businesses

II. What is Pricing in Marketing Management? Kellogg’s Case Study

III. How to Define Pricing in Marketing? A New Horizon for Australian B2B Businesses

IV. The World’s Best Telcos: How to Define Pricing in a Marketing Strategy

V. Define your Pricing Strategy in Marketing: Closing Skill Gaps in your Team


 

 

How to Define Pricing in Marketing?


How to Define Pricing in Marketing for Small to Medium-sized Businesses


 

Price is not just the cost of the product (i.e., what you pay for the product) with a mark up on top to target an agreeable margin. This is a very old fashioned view of pricing and one that leads many small business owners to financial ruin. We want you to avoid this common trap.

 

Price is a very important profit driver for small businesses or early-stage startups. In fact, a 1% improvement in pricing increases profits by 6%. So you need to set your prices correctly and avoid guessing. The loss or gains are too big to guess.

 

So, in this article, we will tackle the topic of how to define pricing in marketing for small businesses. We will also discuss the different perspectives on price so that you know the strengths and weaknesses of different approaches and methodologies.

 

We argue that even smaller businesses should make sure that the price of a good or service is a price that the customer is willing to pay and a price that provides revenue for the company. At Taylor Wells, we believe that setting a price for products or services is one of the most significant decisions that a small business can make. 

 

By the end of this article, you’ll understand exactly how to define pricing in marketing and how to set and manage prices to ensure profitable revenue growth for your business in the best way possible.

 

Let’s define pricing in marketing.

 

Pricing is the method of identifying the value a small business can get in the exchange for the goods and services they sell. As a small business owner, you hopefully sell goods or services for a price that your target market is willing to pay. Not only that but at a price that generates good margins for your business.

 

However, this is not always the story. And, in many instances, pricing is the number one reason why many small businesses fail. Price too high and you price yourself out of the market. Price too low and you forever struggle to sell above costs and eat into your hard-earned revenue and profits.

 

Knowing this then, below are key factors to consider the next time you set a price for a new product or service:

  • Nature of the goods or service
  • Price of similar goods or services in the market
  • Target market
  • Cost of production (such as raw material cost, labour cost, machinery cost, inventory cost, shipping, etc.
  • External factors (such as the economy, legal issues, government policies, etc.)

 

What are the Pricing Objectives for the Small Business Owners?

 

The objective of pricing should be to give you direction on where to take the business as it grows. However, often the objective of pricing devolves into keeping your head above water or fighting with competitors on price to avoid market share grabs.

 

  1. To survive in the market 

 

A major pricing objective of a small business is to set prices as best you can. Price at the early stage of business is a great mechanism to help you gain traction in a new market without alerting opportunistic competitors to what you are doing.

 

Many companies now face the threat of price wars with larger competitors or have to deal with shifting customer buying behaviour, tastes, preferences, etc. A healthy price objective for small businesses, then, should be to set a price that doesn’t mean that are selling below costs.

 

In the early days, this may mean a price point that covers both the fixed and variable costs you incur during this initial phase. But don’t stop there. On top of cost considerations, try to incorporate the following in your price-setting logic:

 

  • Develop your brand name to build recognition for your small business and to build resilience if a price war ensues.
  • Find unique values which your business can add to stand out in the marketplace.
  • Provide products or services that are exclusive to your business to ensure further protection from falling prices.
  • Eliminate high maintenance goods and determine what customers do and don’t want through market research.

 

  1. Maximise the current margins 

 

Many smaller businesses forget to consider the supply and demand dynamic in the market and in turn forgo lots of hard-earned margins. Remember, even for a small business, you want to try and set your price in line with the demand for the product and the substitutes that are available to satisfy that demand.

 

The higher the demand, the higher the price will be and the more money you will make. The best examples are the seasonal supply and demand of goods and services.

 

Once you understand consumer demand within your market, review your own costs, supply chain, and profit goals as a way to inform your choice of pricing strategy. Below are a few pricing models to consider:

    • Cost-plus pricing: The selling price is determined by adding a markup to the unit cost.
    • Competitive pricing: Setting a price based on the price of the competition.
    • Value-based pricing: The price is based on the perceived or estimated value of a product or service.
    • Price skimming: Setting the price high initially and then lowering it as competitors enter the market.
    • Penetration pricing: The price is set low to rapidly enter a competitive market and provoke word-of-mouth recommendations, only to be raised later.
  1. Gaining enough market share quick enough to stay alive and avoid a price war

 

A price war is when competitors continually lower their prices to undercut one another and gain market share. This almost never works out in a small business’ favour, especially when competing against globalised pricing.

 

Many smaller businesses offer low prices for their products because they assume this will capture a bigger market share quickly. However, what it actually does is alert competitors that you want to compete on price and the bigger operators use their scale to crush you.

 

It is highly likely that the market you operate in is becoming more mature. This may mean that there is some element of oligopolistic competition in your market which in turn is encouraging more finesse in devising marketing strategies.

 

So, when you start out try to manage the urge to lower prices and consider the changing competitive landscape. Lowering prices may help you increase volumes now, but it is a short term move and there is no guarantee that it’ll work. What’s more, you can no way compete with bigger firms that can easily leverage their economies of scale to win price wars and beat you into submission.

 

Also, supplier consolidation is a big trend in Australia and many businesses are using this approach to gain market dominance quickly. A small business can’t do this.  Take note, to consider all scenarios when setting low prices as often the consequences are not worth the loss.

 

  1. Quality perceived by the customers on the product/service

 

It is very common for small business owners to set product prices or adjust prices based on their costs or by exclusively looking at the competitor’s pricing. This is a flawed approach and neglects the total economic whole value of your offer to customers.

 

Consider instead then what the maximum price of your product is (your price ceiling) and work back from there (i.e., the total value to customer minus barrier to purchase). Ask yourself: Are you serving price-conscious consumers or an affluent niche? What are the value-added services, if any? How do you compare to your competitors?

 

Maybe trial a minor price change for low-risk products. How do your customers respond to changes in price or a new price in the market? How does demand change when nothing changes but the price? What is the highest price the market will bear?

 

Often, you will find that your customers tolerate a price change much better than you thought they would. However, be prepared to justify the price change, especially if it’s an increase. No one is happy about paying a higher price when it isn’t justified. So, if the reason behind the increase is you want to increase your profitability, this doesn’t always go down well with customers.

 

How to Define Pricing in your Marketing efforts

 

The notion of price differs depending on the frame of mind from which it is being viewed. Let’s define pricing in marketing from different perspectives.

 

Customer’s Perspective

 

How do you define pricing in marketing from the customer’s perspective? The customer uses various criteria to identify how much they are willing to spend, or how much they are willing to pay, to satisfy their needs. Normally, the customer wants to pay as little as possible.

 

For the company, it can either increase the perceived benefits or decrease the perceived costs to increase value. These two components should be considered as elements of price.

 

However, to some degree, perceived benefits are the opposite of the perceived costs. For instance, paying a higher price for an item is remunerated by having that expensive product displayed in one’s home. Other perceived benefits related to the price-value equations are convenience, status, brand, the deal, choice and quality.

 

On the other hand, perceived costs consist of the actual price tag printed on the product and other additional factors. As mentioned, perceived costs are the exact opposite of the benefits.

 

In the end, it is favourable to look at the price from the customer’s viewpoint because it helps define value which the most vital grounds for building a competitive advantage.

 

Society’s Perspective

 

How do you define pricing in marketing from society’s perspective? Taken from the barter method (or exchanging of goods of the same value), the monetary structure of each society gives a more convenient way to buy goods and gather wealth.

 

The two distinct ways that price plays in society are a rational man and an irrational man. The first one suggests that the outcome of price manipulation is predictable (the basic belief underlying economic theory). The second one acknowledges that man’s reaction to price is unpredictable at times. And pretesting price manipulation is a vital task.

 

Why is Price Essential to Marketers?

 

Pricing directly affects the revenue of the business, thus, setting the right price is important to a small businesses’ success.

 

Price is essential to small business owners and marketers alike. However, the biggest difference between getting value-based pricing right and wrong it’s how a small business assesses the value that customers see in their products and the customers’ willingness to purchase the product or service.

 

Why is setting the price of a product/service one of the most vital management decisions?

 

  • Price is the only component that affects profits rather than costs (which affect product, place and promotion of the marketing mix). Price is the element that makes or breaks a business.

 

  • Modifying the price has a great impact on the marketing strategy. Depending on the price elasticity of a certain good, it often affects the demand and sales also.

 

  • Price plays a significant role as a competitive weapon to assist a business in utilising market opportunities.

 

  • Pricing also determines how customers perceive the product. A higher price means higher quality and is associated with luxury. On the other hand, a low price means low-quality products too. Setting a price that either too high or too low will limit the growth of the business. The worst part is, it could cause major problems for sales and cash flow.

 

Admittedly, it’s tough to get the pricing right when you don’t have a process to determine customer value. This is because there are a lot of factors to take into consideration and whether a price change will have the desired effect.

 

The law of demand says that, for almost all products, the demand is lower if the product is priced higher. That means sales will drop if prices are increased. However, a high price can also mean high margins.

 

Price can lead to a company’s survival or downfall. Therefore, a business must set the right price and do the heavy lifting to work out what their customer really value about their products.

 

Impact of Pricing on your Marketing efforts

 

What is the impact of price on small business marketing? Let’s take a closer look. The two ways that pricing affects business and marketing performance are:

 

1.      Marketing budget

 

The price of a product is a determining factor of how much profit the product will generate. Having a high profit means having more money to market a product. On the other hand, low profit means less money in marketing the product.

 

2.      Marketing efficiency

 

The probability that customers will buy your product is higher when you are priced a bit lower than your rivals. Thus, it gives the business a sign of effective marketing.

 

However, there’s a clear challenge if having high prices create a larger marketing budget. And low prices increase the efficiency of the marketing campaigns. The dilemma of the business is finding the right price that is ideal for both the marketing budget and efficiency.

 

It even gets more complex when you think that this balance is not the same for every product on the market. The reason is customers don’t value items the same way and react to price changes accordingly.

 

Conclusion

 

  • It is really important for small businesses to invest more time and effort in their product pricing. That is, to avoid a drop in sales or market share.

 

  • How does price relate to marketing for a small business then? Price is significant to small business marketing because it provides business owners with a tangible number of how much customers are willing to pay now and a view to the future too, i.e., how much more or less they would pay in the future based on changing market conditions and economics.

 

  • Increasing or decreasing the price has a deep impact on a small business’ marketing strategy. In terms of demand and sales, as well as price elasticity of the product/service. Setting a price for its products/services is one of the most significant decisions that a business will make. But having low-priced products is not usually a strong position for small businesses. Pricing too high or too low sets the customer’s expectations.

 

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What is Pricing in Marketing Management


What is Pricing in Marketing Management? Kellogg’s Case Study 


To define exactly what is pricing in marketing management, we’re taking a look at Kellogg’s. Kellogg’s is a multinational food-products company. They are based in the United States and have regional corporate offices and operations around the world.

 

Right now, Kellogg’s is the largest cereal company in the world. They have racked up sales of more than $US14 billion. They are also the second-largest producer of cookies, savoury snacks and crackers.

 

Kellogg’s uses competitive pricing which is based on research and market conditions. They rely heavily on pricing levers like discounts and coupons which can be redeemed for free products. They keep prices flexible to compete with other players and depend on sales growth. However, given their market leadership, the advertising and promotional pricing in the marketing mix of Kellogg’s are dominated by their own brands.

 

In the last few years, though, Kellogg’s like other FMCG businesses have faced increasing margin and price pressure. The underlying reason for the decline in profits is that their trusted brands and products, which have been relied on for more than 100 years, have fallen out of favour with today’s more health-conscious consumers. 

 

What is pricing in marketing management in today’s reality?

 

Kellogg’s is now having to face consumers’ changing tastes and new desires for a “healthy” lifestyle. Consumers are also now more willing to buy private label substitutes for cornflakes and other cereals. This means the products that brought Kellogg’s to life as a company, such as cereal, has lost a lot of its brand equity and pricing power. Supermarkets are also expanding their range of dry goods, including cereals, and consumers have been responding positively. 

 

Kellogg’s is facing the new reality that being the best cereal company in the world is no longer enough to drive demand, especially for millennials. To survive and thrive, Kellogg’s must turn to new options and healthier alternatives.

 

But what is pricing in marketing management in today’s reality? The company has been working to make its products more attractive to younger consumers. There is a clear consensus that customers are increasingly conscious of what goes into their food, which companies are having to respond to. 

 

Kellogg’s has recently stated that by 2018, its products will no longer use artificial colours and flavours in its products. They have also vowed to use only cage-free eggs in the United States by 2025. But they may now have to adapt to new demands from the market and consumers for lower-priced products. To do this, Kellogg’s will have to try out new pricing strategies. Here are a few examples of commonly used pricing strategies in marketing:

 

What is pricing in marketing management – Pricing Strategies in Marketing 

 

  1. Penetration Pricing – this strategy tends to be used when an FMCG business wants to enter the market and/or gain market share from its competitors. Products are priced low initially to set up their customer base in a particular market. An example is when brands offer free trials for a short period or give away free or discounted products at their release. 

 

  1. Economy pricing – this strategy is considered a no-frills low price strategy whereby the promotion and the marketing cost of a product are kept to a minimum. This is done for high-volume products that are easily visible to consumers, such as grocery items.

 

  1. Psychological pricing – this is an approach where the consumer’s emotional responses to brands and products are targeted instead of their rational responses. The most common example is when a consumer sees the price at $4.99, they round down and only see $4.00.

 

  1. Products line pricing – this approach is defined as pricing a single product or service across a range of products and categories. This strategy seeks to optimise prices across the portfolio, while keystone products are highlighted in the range. An example is bundling several products to increase margins – like when a restaurant offers an appetizer + drink combo. 

 

  1. Pricing Optional Products – this is a strategy where companies decrease the price of the main product or service to increase the price of their added services to find incremental margin uplift. For example, airlines increase the price for a window seat or front seat, simply because it’s by the window or has more legroom. This generates ancillary revenue.

 

 

        Define Pricing in your Marketing Management

 

  1. Pricing Captive Products – also known as construct pricing, this is when a business prices its main products concerning related and required products. Printers, for example, are useless without ink cartridges. Both are required for you to make use of the main product.

 

  1. Promotional Pricing – is a strategy to drive volume and revenue by promoting/highlighting offers through discounts, promos, freebies, or coupons. Customers are enticed by the promos, which results in instant spikes in sales to achieve revenue targets. 

 

  1. Pricing as per geographic locations – this relates to prices that vary or change depending on postcode or geographic location. This is because spending power tends to vary by region or postcode. Product scarcity and cost of the delivery are also taken into consideration. Local taxes and exchange rates also vary and impact the final invoice price. 

 

  1. Everyday low pricing – this is when companies reduce prices for routine purchases within a mid-level price range so that consumers trust prices are consistent and fair. Retailers and their suppliers can also ensure more consistent volumes and margins.

 

  1. Premium pricing – this is a price skimming strategy whereby companies put a price premium on new products, novel or that have a luxury aspect to them. 

 

Conclusion

 

To succeed as a business, your positioning, value proposition, and pricing strategies must be aligned. This allows you to maximise revenue and profits. Pricing and promotional strategies also influence market perceptions of your product. Considering which strategy is best for your brand will help you answer what is pricing in marketing management and deliver a consistent brand message and allow consumers to value your offerings properly.

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How to Define Pricing in Marketing: A New Horizon for Australian B2B Businesses is Here


What is Pricing: Pricing is the process whereby large organisations set the right prices for their products, services and assets. It aims to set optimal customer price points, drive profitability and influencing demand. Unbeknownst to many, pricing is more complicated than it looks.

 

What is pricing

 

What is pricing in marketing management and business environments?

 

Pricing is a business’s most highly leveraged profit driver. Companies see an 8% increase in operating profit for every 1% of improvement in realised prices. This is twice the benefit as a 1% improvement in market share, variable costs or fixed-cost utilisation.

Pricing effects profit what is pricing

 

This is why pricing and revenue management teams are essential to the success of businesses. These teams aim at making pricing processes more efficient and innovative. It’s no longer acceptable to make gut-feeling pricing decisions that lead to margin loss and strained customer relations. Doing so breaks down an entrenched commodity mindset and slows down progress.

 

Cost-Plus Pricing

 

For some time, the dominant approach to pricing was cost-plus pricing. This focused on setting the selling price for different assets based on how much it costs to make or deliver an item plus a flat percentage margin. Margins usually aim for around 25%- 50% depending on the industry. This method typically works for hard durable goods and supply-constrained commodities. For example, fuel, gas, chemicals and grains.

Stages of pricing - what is pricing

Typically, businesses that use cost-plus pricing also have a fairly fixed pricing processFixed pricing refers to predefined pricing strategies or structures. These are fairly static regardless of customer value drivers, demand, or market changes. The danger of cost-plus pricing is that businesses tend to overcharge or undercharge customers depending on the market situation.

 

What is pricing process

 

 

Often as costs reduce, so do the sell and cash margins. Year on year, profits fall significantly on the same volume.

 

Cost reduction pricing

Individual sales managers tend to favour cost-plus pricing because it is straightforward.  This method also gives sales teams broad authority to negotiate individual deals by heavy, non-standard discounting. This is what’s referred to as a listless discount.

 

However, procurement teams can easily identify inconsistencies. They can sort through inconsistencies in SKUs or Stock Keeping Units to find inconsistencies and suggest better ways to price items.

 

Value-Based Pricing

 

Value-based pricing is a more sophisticated way to set prices. This is because understanding customer value drivers and price sensitivities across segments can help drive productivity.

 

Value-based pricing can also be implemented in cost-plus businesses. Read more about that here.

 

Key value-based questions pricing teams ask are: What is pricing in marketing management and what does it look like in our situation? Why do our customers buy from us, and what role does price play in articulating the value we offer to our customers? What’s our share of wallets across different brands and products?

pricing process

 

Conclusion

Understanding what pricing is, what strategies there are, and what value drivers allow you to do can enable businesses to grow and succeed and help you answer what is pricing in marketing management. The way you price can drive profitability, but pricing in a vacuum doesn’t work. Pricing also needs to be aligned with your business and revenue models. With the right expertise, you can increase your business capabilities and meet your financial goals.

 

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What is Pricing in Marketing Management?


The World’s Best Telcos: How to Define Pricing in your Marketing Strategy


T-mobile pricing strategy has totally shaken up the telcos market globally with a new value-based pricing strategy. Unlike any telco operators before, T-Mobile’s sole focus is on giving subscribers what they want in their price plans.

 

T-Mobile sets its call rates and packages to cater to the needs of almost every consumer – and at really affordable prices. This is in contrast to Telstra’s marketing and pricing strategy which made special pricing for the combo packages that include broadband, TV, Movies and home phone.

 

A bonus feature for Telstra subscribers is mobile data. However, they’ve limited their free data offer to 150GB a month. If the 150GB data cap is exceeded, your connection will be slowed to 1.5Mbps. This means customers won’t be able to watch HD video or high-speed applications. Also, some web pages, video/social media content and some large files might take longer to load after this data cap. For a faster data service (for free), customers on the basic package have to wait for their next billing cycle.

 

With a clever combination of smarter marketing and pricing strategy, T-Mobile has been able to increase its EBITDA margin since implementing its Un-Carrier moves. In May 2016, for example, T-Mobile offered one share of the company to its most loyal customers.

 

When they did this, their stocks jumped from $39.90 in May 2016 to $66.15 in May 2017. On top of this, the profit margin telecommunication industry also saw an increase of 60%, which is a big return on investment. T-Mobile’s adjusted EBITDA margin went from 26% in 2013 to 37% in 2017. While postpaid phone average revenue per user has fallen a bit since then, that number has been steady since 2015.

 

What is pricing in marketing management in the Telco industry? A look into “Un-carrier” plans

 

Before T-Mobile introduced its value-based pricing strategy – telco pricing was complex and difficult for most of its customers to follow (B2B customers and consumers). The data cap really annoyed subscribers, because excess data was automatically added to the billing of their mobile plans.
In 2015, T-Mobile dramatically simplified its pricing revenue model by providing  “Un-Carrier moves.”  Instead of paying for data, subscribers pay for the lines. The ‘pay for lines’ model was enormously successful. But as change and disruption continue to hit the telcos market, the question is can T-mobile’s value strategy continue to meet the demands of subscribers? In other words, are mobile users too fussy to please and too tight to pay more? 

Mobile users want more of everything – especially unlimited data.

 

However, telco operators are worried about giving away too much data. Unli-data is not something that telco operators are willing to give for free right now. Because of this, they are experiencing considerable margin pressure.

 

Telcos don’t want to give away too much before knowing how it’s going to impact them in the long term.  This is why they have to cap the data at 1 Gbps so all the users can use the limited bandwidth during the day.

 

The data system works like this; bandwidth is what keeps data moving. From finding information in search engines to video streaming on youtube. Essentially you are downloading data to the device’s buffer files. Once finished, those buffer files are deleted. The more usage, the more bandwidth is required.

 

That’s why the business strategy for telecommunications companies is to constantly upgrade their network to meet the demands of the users and offer the best deals. This keeps them from abandoning their mobile plans in favour of other telecommunications companies.

 

T-mobile Marketing and Pricing Strategy 

 

T-mobile went beyond traditional pricing methods and their pricing strategy paid off. They addressed the gripes of the users and unveiled their Un-carrier rebranding. The Un-carrier provides a single unlimited data plan like unbundling gadgets from the service plans, data cap removal from music and video streaming that would include taxes and fees in its price strategy.

 

The result was an additional 1.1 million more customers. This was the largest recorded user growth in a telco network, making T-mobile one of 2014’s Most Innovative Companies.

 

T-mobile is aware it is nowhere near the number of customers Verizon and AT&T has. However, they turned that into an advantage by offering bundles that neither competitors have.

 

A Phone Line vs. Data

 

T-mobile offered unique promotions, such as adding a line for free for family and offering couples of 55 years and older higher customer lifetime value and lower average customer acquisition cost. They aim to maintain a stable average revenue per user while pursuing aggressive pricing to attract new users.

 

Demographically speaking, 55 years and older have more credit than the younger demographic group. They also don’t use much as data and would rather stay with one provider. It makes sense T-mobile targets older people as they are more profitable and increase telecommunications revenues.

 

While its rival companies are finding to keep their margins profitable by offering higher-priced plans, T-mobile is slashing its prices and is adding more value to its plans to entice more customers.

 

Contractual Mobile Plans

 

The way the telco companies keep their profit margin is by subsidising smartphones with data plans. Admittedly, no one wants to pay the full price of a smartphone. They offer the device either at a very reduced price or for free provided that the subscribers keep using their plans for a duration of time under contract.

 

So the user pays the companies a subscription rate to use their service. The telco companies slap you with a hefty early termination fee (ETF) if you wish to terminate your contract early. This is to cover the cost of the subsidy on your device.

 

Contract-less Mobile Plans

 

Gadgets are constantly being upgraded, which leaves you stuck with outdated versions. This makes you powerless to change the terms of the contract. But with T-mobile’s flexible plans, you pay a portion of the price of the gadget upfront plus the monthly rates. At any time you want to end the contract, you can pay the price of the device minus the monthly payments already paid.

 

As T-mobile’s revenue improves, so does traction for contractless plans. It allows for flexibility to leave before the normal two years, which offers customers an option unlike anywhere else. Subscribers found the plans easy to understand. Additionally, there are no activation fees.

 

However, in terms of performance, the coverage is not the best if you live in a suburban or rural area. All in all, T-mobile plans are in harmony with the needs of the subscribers.

 

Let’s Define Pricing in Marketing Management – Overpricing vs. Underpricing

 

Pricing is what keeps telco companies attractive to consumers. It dictates the value of the product and the benefits the customers can get from it.

 

If overpriced, the products will not perform well in the market. If underpriced, the product becomes unprofitable to the company. This forces the telco company to discontinue the product line which results in souring the customer relationship with the company.

 

  • T-mobile’s marketing and pricing strategy are based on what the subscribers wanted in their plans, by removing the data cap and purchasing the line instead of the data plan.

 

  • Their unlimited plans called the Un-carrier plans are gaining market shares in the telecommunications industry. They are a telco company that is in tune with its subscribers and offers them affordable plans.

 

  • T-mobile introduced contract-less mobile plans which provide flexible payments. Unlike other plans, you can opt to buy the phone with the previous payments to offset the balance.

 

  • Other telco companies are catching up to T-mobile marketing strategy. Now the bigger telcos are noticing T-mobile unlimited plans. Hence, their future pricing and marketing strategy will include unlimited data instead of capping the data flow.

 

Conclusion

 

T-mobile is changing the way telco companies are servicing their subscribers.  Many telcos companies have neglected their subscribers and have not given them what they want: more data. The telcos need to address the concerns of their subscribers if they want to keep them using their plans. T-mobile’s marketing and pricing strategy has increased its market share, while other rival companies struggle to keep up by trying to competitively lower their price to match T-mobile prices. This shows the power of insight and innovative thinking on a company-wide level.

 

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Define your Pricing in Marketing by Closing Skill Gaps in your Team


We used to hear a lot about ‘the war for talent’ – and that scarcity of talent was the biggest HR challenge facing all businesses. But scarcity is not the real problem, as there’s lots of talent out there. The real problem is knowing what good pricing talent looks like and then securing that talent before your competitors do.

 

Today, it is much harder to find the right pricing talent. By this, we mean talent that can help your business develop the best pricing methods and strategies. Many businesses still rely on job titles and CVs to source talent for pricing roles. However, the increase in bad hires and talent churn in pricing functions tells you that you cannot just find niche skills by looking at people’s position titles or CVs. You need to look much closer at your applicants.

 

For one, you need to identify the right skills for the pricing strategy – which can be difficult if you’re not sure what you’re looking for. And two, you need to find the best fit for the role – which is not as easy as it sounds, either because the best people for pricing roles may have never held a specific pricing role or position before.

 

What Should you Consider? Define your Pricing Strategy in Marketing through Capable Teams

 

The marketplace for pricing talent is more competitive than its ever been. Candidates are much more informed about their choices and more discerning in their selections.  On top of this, in sectors such as technology, finance and pricing, the in-demand skillsets are ever-changing.

 

This means you need to identify talent before the choice of hiring pricing talent is taken from you. Their profiles should be a combination of unique skills and experience, rather than a general list of qualities individuals on your team already possesses. Let go of the idea of the purple unicorn. This was an outdated idea that talent was rare. It isn’t. You just have to employ the right strategies to spot the people you need, which can be harder than it looks.

 

To find the best candidate for your team, it’s important to set the stage. Create a sophisticated digital strategy that highlights your direction or story and explains your branding. Give your applicants compelling reasons to work for your company. This will give you a better chance to find the candidates you’re looking for.

 

It may seem counterintuitive, but you need to tailor your campaign for your potential employees just as much as your target audience. It’s also helpful to create micro-sites apart from the main career landing page. This will help you spot uniquely specialized individuals you may have otherwise missed.

 

Build Competitive Insight

 

The key to a successful hire is to be realistic about what gaps in your team’s skillset you need to fill. Your potential hires are also going to be looking from company to company to see who offers them the best deal. This is where you could miss out. Look at your direct competitors and see what they are proposing.

 

This isn’t to say you’ll be able to outbid everyone. What you can do is gain insight into what the candidate’s values, aspirations, and ambitions are. Use this knowledge to make candidates feel valued in the workplace, and be consistent. This can also help you in the future. The goals of candidates should be understood to make sure their work is aligned before they start to feel unmotivated and undetermined. This will nip it in the bud before they even consider jumping ship to another company. Gain insight by reaching out from the get-go.

 

Companies need to update their hiring strategies if they want to keep up and maintain a roster of well-rounded and specialized workers. Keeping with outdated hiring practices can have you realise that you hired the wrong people for the roles when it’s too late. Make sure to keep your information and digital platforms updated regularly and targeted properly. Find out what the candidates are looking for out of a job or company and address those needs. Doing so will allow you to hire the best people for your team.

 

For a comprehensive view and marketing research on integrating a high-performing capability team in your company,

Download a complimentary whitepaper on How To Maximise Margins.

 

 

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Are you a business in need of help to align your pricing strategy, people and operations to deliver an immediate impact on profit?

If so, please call (+61) 2 9000 1115.

You can also email us at team@taylorwells.com.au if you have any further questions.

Make your pricing world-class!

 

 

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