Pricing 8

• Pricing Strategy


  Pricing in Relation to Branding, Strategy, and Operations
• Cost Leadership and Differentiation


  • The SWOT and TOWS
• Branding in Relation to Pricing


  Branding plays a crucial role in pricing strategy because it influences consumers' perceptions of value
• Branding in Relation to Pricing

  A strong brand can command higher prices, as customers are often willing to pay more for products or services associated with quality, reliability, and prestige
• Branding in Relation to Pricing

  Effective branding can differentiate a product from competitors, allowing companies to justify premium pricing and maintain customer loyalty
• Strategic Branding


  Everything starts with Brand Identity
• Brand Identity


  This includes elements such as logos, color schemes, typography, and brand voice
• Brand Colors and Meanings


  • Red: Symbolizes passion, energy, and excitement. Can evoke strong emotions and create a sense of urgency. Often used by brands to convey power, love, or intensity.
  • Blue: Represents trust, reliability, and professionalism. Often associated with calmness, stability, and security. Frequently used by corporate and financial institutions to build trust with customers.
  • Green: Symbolizes growth, freshness, and nature. Associated with health, sustainability, and harmony. Commonly used by brands in the health, wellness, and environmental sectors.
  • Yellow: Represents optimism, happiness, and positivity. Can grab attention and create a sense of warmth. Often used by brands to convey energy and enthusiasm.
  • Orange: Symbolizes creativity, vitality, and adventure. Evokes feelings of excitement and enthusiasm. Frequently used by brands to create a sense of fun and approachability.
  • Purple: Represents luxury, royalty, and sophistication. Associated with creativity, wisdom, and spirituality. Often used by brands targeting a premium or niche market.
  • Black: Symbolizes power, elegance, and authority. Creates a sense of sophistication and timelessness. Commonly used in luxury and high-end branding. Examples: Chanel, Nike, Adidas.
  • White: Represents purity, simplicity, and cleanliness. Creates a sense of openness and neutrality. Often used to convey simplicity and minimalism. Examples: Apple, Adidas, Google.
• Brand Positioning


  Strategies for positioning your brand in the market relative to competitors, including finding your unique selling proposition (USP) and defining your target audience
• Brand Positioning Examples

  • Jollibee: "A Taste of Home"
  • Globe Telecom: "Enabling Digital Lifestyle"
  • Mang Inasal: "Authentic Filipino Barbecue Experience"
  • Philippine Airlines (PAL): "The Heart of the Filipino"
  • Bench: "Global Filipino Fashion"
• Brand Storytelling


  The power of storytelling is crucial in shaping brand identity and connecting with consumers on an emotional level
• Emotional Connection


  Brand storytelling aims to evoke emotions such as joy, nostalgia, empathy, or inspiration in consumers
• Humanization


  Effective brand storytelling humanizes the brand by highlighting the people behind it, whether it's the founders, employees, or customers
• Unique Narrative


  A brand's story should be distinct and memorable, setting it apart from competitors. Whether it's the brand's origin story, values, or mission, the narrative should be compelling and resonate with the brand's target audience
• Brand Storytelling Examples


  • Heartwarming Commercials
  • Filipino Cultural Identity
  • Iconic Mascot
  • Consistent Brand Messaging
  • "langhap-sarap" (deliciously aromatic) food, warm and welcoming service, and memorable dining experiences
  • Digital Storytelling
  • Customer Testimonials
  • Brand Global Expansion
• Hierarchical Planning


  • The Mission
  • Goals
  • Strategy
  • Tactics and Operation
• Mission Statement


  Serves as the basis for organizational goals, providing details and the scope of the mission
• Strategy


  • A plan for achieving organizational goals
  • Organizational or Business Level Strategies - "How do we compete?", "How do we gain (a sustainable) competitive advantage over rivals?".
  • Functional Level Strategies "How do we support the business-level strategy within functional departments, such as Marketing, HR, Production and R&D?"
• Tactics


  The methods and actions taken to accomplish strategies
• Operations


  The actual "doing" part of the process
• Branding is to establish Competitiveness


  Competitiveness refers to an organization's ability to outperform its rivals by producing goods or services more efficiently, effectively, and innovatively to meet customer demands and achieve sustainable success in the marketplace
• Factors Affecting Competitiveness


  • cost efficiency
  • product quality
  • Innovation
  • market positioning
  • supply chain management
  • labor skills
  • government regulations, among others
• Business-Level Strategy


  A plan that a company develops to achieve its goals and objectives in a specific market
• Pricing in Relation to Business Level Strategy

  Business level strategy is important in pricing strategy because it defines how a company positions itself within its industry and how it competes against rivals
• Pricing in Relation to Business Level Strategy

  A business focusing on differentiation may implement a premium pricing strategy to reflect the perceived higher value of its unique offerings
• Pricing in Relation to Business Level Strategy


  A cost leadership strategy may involve setting prices lower than competitors to capture market share
• Pricing in Relation to Business Level Strategy


  The pricing strategy should be a deliberate component of the broader business strategy to ensure consistency and effectiveness in achieving business objectives
• Business-Level Strategy


  It involves making strategic decisions about how a business will compete in its industry, who its target customers will be, and what resources it will need to succeed
• Importance of Business-Level Strategy

  Business-level strategy is important for companies because it helps them differentiate themselves from their competitors and attract customers. It also helps businesses to be more efficient in their operations, which can lead to cost savings and higher profits
• Types of Business-Level Strategy


  • Cost leadership strategy
  • Differentiation strategy
• Cost Leadership Strategy


  Cost leadership strategy is about being the lowest-cost producer in the market. This strategy involves reducing costs in all areas of the business, including production, distribution, and marketing. The goal is to offer products or services at a lower price than competitors, while still maintaining a profit
• Examples of Cost Leadership Strategy in the Philippine Setting

  • Mang Inasal: Mang Inasal is a fast-food chain in the Philippines that uses cost leadership strategy by offering affordable grilled chicken meals
  • Cebu Pacific: Cebu Pacific is a low-cost airline in the Philippines that uses cost leadership strategy by offering low-cost airfare to customers
  • Puregold Price Club: Puregold Price Club is a chain of supermarkets in the Philippines that uses cost leadership strategy by offering products at low prices
• Benefits of Cost Leadership Strategy


  • Increased market share
  • Ability to offer products or services at a lower price
  • Increased customer loyalty
  • Higher profits
• Risks of Cost Leadership Strategy


  • The possibility of sacrificing quality in order to reduce costs
  • The threat of competitors undercutting prices
  • The need to continually find new ways to reduce costs
• Examples of Companies Using Cost Leadership Strategy


  • Walmart
  • Southwest Airlines
  • McDonald's
• Differentiation Strategy


  Differentiation strategy is about offering unique and high-quality products or services that are not available from competitors. This strategy involves investing in research and development, marketing, and branding to create a unique value proposition for customers
• Examples of Differentiation Strategy in the Philippine Setting

  • Max's Restaurant: Max's Restaurant is a popular chain of restaurants in the Philippines that uses differentiation strategy by offering a unique and distinct flavor for their signature dish, the "Sarap-to-the-Bones" fried chicken. They also have a warm and welcoming ambiance in their restaurants that sets them apart from other fast-food chains.
  • Rustan's: Rustan's is a luxury department store in the Philippines that uses differentiation strategy by offering a curated selection of high-end brands and products, as well as personalized customer service. They also have a reputation for being the go-to destination for luxury shopping in the Philippines.
• Benefits of Differentiation Strategy


  • Ability to charge higher prices for unique products or services
  • Increased customer loyalty
  • Reduced price sensitivity
  • Increased market share
• Risks of Differentiation Strategy


  • The possibility of customers not valuing the unique features of the product or service
  • The need to continually invest in research and development to maintain differentiation
  • The threat of competitors copying the unique features of the product or service
• Examples of Companies Using Differentiation Strategy


  • Apple
  • Nike
  • Tesla