Marketers Must Ensure Customers ' Perceived Value Of The Product Coincides With The Price

Marketers Must Ensure Customers ' Perceived Value Of The Product Coincides With The Price

Length: 714 words (2 double-spaced pages)

Rating: Better Essays

Open Document

Essay Preview

Marketers must ensure customers’ perceived value of the product coincides with the price. The price is how much the customer pays for the product. Prices need to be high enough to make a profit, while also being in a price range that is affordable for a target market and appropriate for the competitive environment. Recently, a cup of Starbucks coffee increased 5 to 20 cent depending on the size because of various business factors. “The company has been raising wages for partners and shift supervisors, adding a food benefit program, developing new partner apps for viewing work schedules, on top of other efforts such as tuition reimbursement and health care benefits” (Kim, 2015). Rather than trying to compete with cheaper chains like Dunkin, Starbucks uses price hikes to separate itself from the pack and reinforce the premium image of their brand and products. Since many of their customers are very loyal and not price sensitive, their coffee “maintains a fairly inelastic demand curve, and a small price increase can have a huge positive impact on their margins without decreasing demand for beverages” (Dawson, 2013). Starbucks’ sales were up by 7% here in the United States, which remains the trend for sales since 2010 (Wattles, 2015). Unlike Starbucks, competitors have not always profited in sales when raising coffee prices. For example:
J.M. Smucker Co reported a quarterly loss, hurt by higher green coffee costs and lower U.S. demand for its coffee products after it raised prices. The company, also known for its Jif peanut butter, reported a net loss of $90.3 million, or 82 cents per share, for the fourth quarter ended April 30 compared with a profit of $118.5 million, or $1.16 per share, a year earlier. Net sales rose 17...

... middle of paper ...

... become a forerunner in mobile advertising. Starbucks received an award for its technical savvy, Mobile Marketer of the year, in 2010 (Klein, 2012). The next year, they launched an app that accepted mobile payments, which saw 26 million mobile transactions (Klein, 2012). Starbuck has also engaged in the phenomenal social media market. They are making the most of the features and functions associated with the social networks in order to increase its supporter and maximize likes, shares, and re-tweets. For example, Starbucks audience has grown, on Twitter it has surpassed the mark of “2.8 million followers and, on Facebook, has registered more than 31.5 million likes to the company 's business page” (Klein, 2012). Starbucks believe that it is their mission to stay connected to their customers, which is why they are investing heavily into the social media market.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

Essay on The Between The New And The Old That Will Ensure

- When creating a new product there are many different factors that one must considered and analyze before entering into the market. There are many different products and services’ entering into the market every day and it is the differences between the new and the old that will ensure successfulness. Many times a consumer may not be aware that such a product or service exist or that there is even a need for one until they are made aware of it. This awareness comes from advertisements used by marketer and the success of the product or service depends on this process....   [tags: Marketing, Target market, Target audience, Target]

Better Essays
1645 words (4.7 pages)

Essay on Strategies in Price Communication

- Price Communication One of the strategies to influence the consumers’ willingness-to-pay is through the use of price communication. In order for companies to gain their market share they need to ensure that consumers understand the value of the company’s products both economical and psychologically. In studies conducted by researchers many business managers have noted that the most important capability in their pricing strategies is accurately “communicating value and price”. On the other hand, they also note that it is one of the weakest capabilities for most organizations to perform (Nagle, Hogan & Zale, p....   [tags: Business]

Better Essays
1360 words (3.9 pages)

The Value of Product Testing Essay

- Based upon 30 years of marketing research experience, spanning thousands of research projects, I am convinced that product testing is the single most valuable marketing research that most companies ever do. The great value of product testing is, perhaps, best illustrated by some of its many uses. It can be used to: • Achieve product superiority over competitive products. • Continuously improve product performance and customer satisfaction (i.e., to maintain product superiority, especially as consumer tastes evolve over time)....   [tags: Business Market Research]

Better Essays
1518 words (4.3 pages)

Customer Service For Retail Store Essay

- Customer Service in retail store TOPIC –1 CUSTOMER EXPECTATION AND PERCEPTION IN ORGANISED RETAIL SECTOR.Name of the author – Dharmesh Motwani.Year - 2012 – 13, Volume – 2.ISSN 2277-1166.Page – 145. Observation – In this competitive world, retailers needs to ensure that quality services are delivered to retain the customers and improve the services as per the customer convenience, accordingly strategy must be developed. To attract more customer retail sector must be well organized as there is personal interaction and physical aspects involved that affects customer perception and if customer are happy they are satisfied with services....   [tags: Retailing, Product, Sales]

Better Essays
1342 words (3.8 pages)

Features And Pricing Of Marketing Essay

- Functionality and Pricing Part A: With Products, Is It Form or Function. Strong brands influence purchase behavior (Dyson, 2016). Marketers must, therefore, focus on triggering motivating impressions amongst the consumers. Particularly, they must ensure that as consumers contact the brands, news, gossip and publicity will be inevitable (Gassmann, 2010). To achieve this, the functionality of the product should be unrivaled. Simply, product functionality is the key to brand success. With the massive expansion of credit availability since the 1970’s, consumers have been allured into making impulse purchases (Pusvasiu, 2015)....   [tags: Pricing, Marketing, Price, Consumer protection]

Better Essays
1214 words (3.5 pages)

Essay on Customer Perceived Value Of A Product

- Customer-perceived value A popular theory used in branding and marketing is known as customer-perceived value. This theory points out the successes of a product and is largely founded on whether or not customers believe it can satisfy their requirements. This process also emphasizes that when a company develops its brand and markets its products, it’s the customers who ultimately decide how they will understand and react to marketing messages. Companies spend a significant amount of time researching the market to get an overall picture of how consumers think and feel....   [tags: Brand, Branding, Brand management, Value]

Better Essays
1027 words (2.9 pages)

The Price Of A Product Or Service Essays

- The price of a product or service is set by a business that follows a strategic plan depending on the type and quality of there offerings. Such a procedure takes into consideration multiple factors that should be treated, such as the manufacturin¬¬g cost, the labor’s cost, the distribution’s cost and the marketing cost. Other than satisfying the expenses of the company, the marketing plan also plays a significant role in the pricing decisions. The price of a product may have an attracting or repelling feature towards the customer (Monroe 1979)....   [tags: Marketing, Demographics, Consumer theory]

Better Essays
824 words (2.4 pages)

Marketing Mix : Product, Place, Price, Promotion Essay

- The Marketing Mix Product, place, price, promotion are the four p’s of the marketing mix. These four p’s are what make up marketing and what drive consumers to a certain product or service. A marketing mix is a phrase used in the business world to allow different options of the way a company wants to put their product or service on the market. The product or service is what the customer is looking for and will decide whether or not purchase based off of its looks, color, size, or cost. Place is the location of where this item can be found by its customer....   [tags: Marketing, Price, Pricing, Marketing mix]

Better Essays
2002 words (5.7 pages)

Marketing Mix : Product, Price, Promotion, And Place Essay

- The 4 Ps of marketing refers to the terms product, price, promotion and place. These four components make up what is known as the ‘marketing mix’. Each of the Ps focuses on a different element of the marketing mix. Product refers to the actual good or service on offer from a business. Price refers to the price set for the aforementioned product, and the particular pricing strategy that the firm has chosen to implement. Promotion refers to the promotional strategies that are used to sell the product, and the communication that is undertaken to persuade customers to purchase the product....   [tags: Marketing, Marketing mix, Pricing, Price]

Better Essays
720 words (2.1 pages)

Developing a New Product Essay

- My innovative business idea concerns the introduction of a new product in the market which is aimed at reducing the deaths of American soldiers during war together with other innocent civilians. The product shall be marketed under the brand name “Sham-lethal detector”. A lot of research will be put in the development of the device which utilizes the latest technology. In addition, the product will not only be able to detect explosive devices but also landmines that are mostly found in war torn areas especially Iraq and Afghanistan....   [tags: Business Product Development]

Better Essays
1946 words (5.6 pages)