What role does pricing play in creating an image for a product or service? What pricing strategy do you recommend for Timbuk2? Explain?
A) Pricing a product plays an important role in creating product perceptions. When a product is priced it gives out certain image perceptions or brand connotations that are attached to its price tag. Mostly, higher priced items are perceived as high quality or differentiated image (branded) products. These products are priced as such to appeal wealthy customers or to the higher end of the market who is willing to pay a premium for the brand connotations attached to the product. If the same product is priced lower it is thought of being as a low end product made for the price conscious customers. Such products are also often perceived to compromise on quality. I recommend a value based pricing strategy for Timbuk2. Philip Kotler says the following about this strategy
Value-based pricing… The company sets its target price
based on customer perceptions of the product value. The targeted value and price
then drive decisions about product design and what costs can be incurred. As a
result, pricing begins with analyzing consumer needs and value perceptions and a
price is set to match consumers perceived value (Principles of Marketing 703).
Since Timbuk2 has already created a good brand image it should use this strategy to encash its perceived value to the end customer. By enacting this pricing strategy the company will be able to demand higher prices based on the prestige image of its products. This will result in higher profit margins and better revenue. Timbuk2’s premier image creation can be seen through its website marketing: “We pay homeage to our premier bag, classic messenger bag, by giving you option to choose from a wide selection of specialty fabrics”. (www.timbuk2.com)
These are just random excerpts of essays, for a more detailed version of essays, term papers, research paper, thesis, dissertation, case study and book reviews you need to place custom order by clicking on ORDER NOW.