4 Ps of Marketing: Pricing & Promotion Strategies for Businesses - Research Paper

Introduction

Product pricing and promotion are among the "4 Ps" of marketing strategies most businesses use to influence market trends. Promotion is disseminating information about a product, the product line, product brand, or the entire company. Elsewhere, price is what the product owner charges for its value. Pricing has an immediate impact on revenue and profit because customers will sometimes judge the quality of a product based on its price. When developing a pricing and promotion strategy, any business entity should consider some factors to ensure product effectiveness in the market. For instance, the intended amount of the product should reflect the value provided versus that of the competitors. Besides, the prices should also match the amount that the market is willing and able to offer while supporting the product brand.

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Moreover, the price should enable the business entity each it is the market share and revenue targets while maximizing profits. This analysis provides various examples of pricing and compares factors influencing promotional strategies for the pricing strategies, and then it determines the approach represented by the Carhatt brand. Besides, it also discusses the alignment of the chosen pricing strategy with the messaging strategy in the promotion.

As earlier mentioned, pricing is among the sensitive strategies that have an instant effect on the financials of a business (Srinivasan & Hanssens, 2009). A common theme of this strategy is finding the best way of selling products to the most price-sensitive consumers who are likely to represent the bulk of business returns. Besides taking care of the sensitive consumer, the business should be able to continue charging premium prices to those consumers willing to pay more.

A business may opt for setting prices slightly higher than similar products due to various factors, including overhead and other related costs, complexity, and quality of the product. The promotion of a product to sell successfully under the premium pricing strategy is quite challenging because it involves consumers to pay more for a product with complimentary in the market. Therefore for the success of such a product, the business needs to convince the market forces that the product may be serving the same purpose as the cheaper ones in the market, but it is unique. The uniqueness may then come from quality, stages of the life cycle, which describes the durability of the product, and experience from customers who previously used the commodity.

Most businesses face challenges introducing new products in the market; therefore marketers would suggest the adoption of penetration pricing strategy as a solution. It involves setting slightly lower prices with the aim of attracting customers while promoting the commodity to a broader market range. Penetration pricing is in itself a product promotional strategy because it ensures that a product penetrates the market, and most businesses review the prices of such products in the end. Other promotional plans influencing the decisions to implement penetration pricing include the cost of promotion, the effectiveness of the promotional tool, and the availability of funds.

Elsewhere, a business may decide to employ economy pricing when it does not aim to make much profit, and the aim is not necessarily maximizing profits as usual in the business world. Some people may start up a business for prestige or any other reasons and assign low prices for the commodities that have decreased production cost, referred to as economy pricing. Few factors influence product promotion in this kind of pricing strategy because the business minimizes advertising and promotional expenses. All they do is to avail the products in front of the consumers.

Highly competitive market structures call for stepped-up marketing strategies that a business must employ to increase sales volume (Nagle & Muller, 2017). In a market with similar products in terms of design, quality durability, and any other desirable characteristics of commodities alarms, the businesses to employ other means to make sales. One of the most practical strategies is psychological pricing, where companies set prices slightly lower than rounded up figures in a belief that they do not round the statistics up. Therefore, they treat the costs as more moderate, and this is an emotional response to specific price points, enhancing prospects on sale volume. Psychological pricing is a strategy influenced by the nature of the market, market size, and characteristics of buyers as the main product promotional factors.

Similarly, when products are new in the market, businesses may come up with a short period plan to promote such commodities before reviewing their market price. They employ promotional rates as they move around the market to sell the idea of the availability of the product. The prices at this stage of a product's market life cycle are slightly lower, inviting a large sales volume. The principal promotional factors influencing the decision of promotional pricing strategy are the nature of the product, cost of production, effectiveness of the promotional tools, and quality of the market.

Carhartt Brand

Carhartt factory designing its products in Dearborn, Michigan United States produces rugged, durable, high quality wears, and it can transcend various demographics. The designer wear company founded in 1889 has had a steady business success flow for many decades. In history, the company became de factor supplier of garments to labors, including construction site workers and nurses who needed durable garments (Thomas 2015). After the brand transcended successfully to a global market, reach diversity called for as a transition to extend the scope of business from factory to the fashion show. In recent years, the factory is making a conspicuous jump from cornfields to street catwalks. It, therefore, created a separate company (Carhartt WIP) known for producing a fashion-forward version of the Carhartt traditional products.

The brand emerged as a lifestyle choice in the 1980s, and it gained popularity in the hip-hop scene when it became a choice for the rappers due to its affordable and functional items. It later becomes a famous brand across Europe and the entire Americas continents. The global face that Carhartt shows give it a success purpose to continue making the brand better with changes in season and consumer preference. Well known for quality, durability, and ruggedness, Carhartt best suits premium-pricing strategy because most consumers of the factory's commodities associate the price with these qualities. The premium pricing strategy is useful for the brand; it convinces the customers that the commodity in question has the traits advertised during product promotion exercise. Most quality-oriented consumers relate quality to price. They believe that cheap commodities are of low quality and are not durable and fashionable. They trust that quality designer wears must be expensive because they take a fortune to manufacture.

The opening of Carhartt WIP was finding a way to promote non-garment fashion wears, and the messaging strategy was to create diversity in the durability and quality-oriented factory. The communication in the product promotion during the opening of the WIP spoke about the designer's work by the factory and the continuity of the implementation of the premium pricing strategy. The strategy could be the only way to make consumers who believe in designer quality, and durability accepts the factory's products away from the work garments.

Conclusion

Pricing strategy and product promotion are essential marketing tools that a business must employ to realize its core objectives. Pricing has an immediate effect on the financial stability of any company, depending on the startup objective of the company. Promotional factors influence different pricing strategies. Therefore, before a company chooses on which approach to employ, they should analyze promotional factors in line with the objectives of the company to minimize losses. A good case example is the Carhartt factory that continues to transcend to the global market due to its rugged, durable, and quality products that appeal to the eyes of potential consumers. The factory implements the premium pricing strategy to confirm that the products offered to the consumers are of value and will serve them for an extended period.

References

Nagle, T. T., & Muller, G. (2017). The strategy and tactics of pricing: A guide to growing more profitably. Routledge.

Srinivasan, S., & Hanssens, D. M. (2009). Marketing and firm value: Metrics, methods, findings, and future directions. Journal of Marketing research, 46(3), 293-312.

Thomas, M. (2015). Picture Man: The Legacy of Southeast Alaska Photographer Shoki Kayamori. University of Alaska Press.