The Pricing Strategy Of The Faucet Industry Essay

The Pricing Strategy Of The Faucet Industry Essay

Length: 746 words (2.1 double-spaced pages)

Rating: Better Essays

Open Document

Essay Preview



















Kohler is one of the biggest brands in the faucet industry offering a way variety of products in its brand portfolio through numerous distributors. Looking at the faucet industry, which Hygieia will be brought. The pricing structure can vary from $150 through $1,200 depending on the materials, cost, and even where the product is marketed to. Hygieia will be brought into the industry with its differentiated features at a price point of $449. When the product line is successful we plan to manufacture a lower price point option, and a third higher price point option.
Value based pricing was the pricing strategy we used to determine the current price point. Prior to our concept and design, we looked at the customers’ needs to solve a current problem, which was poor hand washing habits. We then assessed the value perceptions to help determine a target price to match the target value. From there we went to the drawing board, and based on the information we gathered we developed the Hygieia. The current pricing was to match the customers perceived value, and to cover the costs incurred in manufacturing. (CITEbook)
The reason we took this approach was because when developing the Hygieia, we didn’t want to make the mistake of designing a product without any research on customer values in our markets. Costs are important to take into consideration when setting prices. If we made the mistake of setting the prices too high for a product our customers didn’t want, it would have been a very disappointing outcome. If the price turns out to be high, Kohler would have settled for lower markups or lower sales.
By pricing the Hygieia from researching consumer needs and value perceptions we were able to design a product around the...


... middle of paper ...


...can range from $150 through $1,200, and depending on the segment they focus on such as residential, or commercial. Looking at the majority of pricing offers the Hygieia, undercuts most of the market being right in the middle of the pricing structure while offering better features for an affordable price.
Compared to the market the $449 price point might not be affordable to a percentage of the population. We are trying to focus on the income levels of $50k and more annually. When this product line is successful, we will explore on expanding the Hygieia brand to have an more affordable product, and also a higher end version we hope to see come out next year. The current price is set to see a 55.5% profit margin; we can adjust this price if it seems fit to help increase sales during the holiday times, promotions, or with additional incentives.













References

Need Writing Help?

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

Check your paper »

Pricing Strategy For The Ticketing Industry Essay

- Comparison of Alternatives Firms in the ticketing industry have different combinations possible when it comes to pricing strategies. Unless it is for few very specific events, most tickets sold nowadays are subject to tier pricing as well as variable pricing. The decision the firm must make is whether to adopt fixed or dynamic pricing. Tier Pricing The basis of this strategy is that each seat will bring a different value to the customer. For large event, there is a wide range of willingness to pay (WTP) for tickets, each associated with different demographics....   [tags: Marketing, Pricing, Live Nation, Secondary market]

Better Essays
984 words (2.8 pages)

The Pricing Strategy For Cinemas And Concerts Essay example

- It is a good entertainment experience to watch film or concerts on causal occasion. However, I am always confused as to why all seating prices are the same for a film in a cinema. Why don’t cinema promoters set different ticket prices for different seats from the first row to the last row in a room that is available to hold almost 200 audiences. While different seating prices vary greatly for concerts, the highest prices at concerts are over hundreds of dollars more than cinema prices. So, why does the cinema industry and concerts industry set different seating price strategy....   [tags: Cost, Costs, Pricing, Transaction cost]

Better Essays
1023 words (2.9 pages)

Price Discrimination Is A Pricing Strategy Essay

- Price discrimination is a pricing strategy that charges customers different prices for the same product or service. In pure price discrimination, the business charges a customer the maximum price that they are willing to pay . This practice is becoming more and more important for customers because of the discrete ways that businesses are finding to make it easier to implement them in many different ways. These are categorized into three forms; First-degree price discrimination, second-degree price discrimination and third-degree price discrimination....   [tags: Airline, Marketing, Pricing, Price discrimination]

Better Essays
1143 words (3.3 pages)

Pricing Strategy Of Honda Automobile Corporation Essay

- “A satisfied customer is the best business strategy of all” (LeBoeuf, M. n.d.). The introductory citation by American Businessman Michael LeBoeuf captures the nucleus of this essay. In which, the focus of this paper will be the pricing strategy of the Honda Automobile Corporation. This assignment will deliver a brief overview of Honda’s prices in comparison to their competitors. Next, my thoughts on how Honda forms their prices. Finally, a condensed dialogue of three pricing strategies and my thoughts on whether or not, these strategies are utilized by Honda....   [tags: Pricing, Price, Suggested retail price]

Better Essays
728 words (2.1 pages)

Value Based Pricing Strategy For Your Product Or A Service Essay

- Determining a price for your product or a service is among the most important business decisions. Without the right price, you can make or break a business. It can impact your sales figures, your profit margins and your ability to pay the bills, among other things. While there are different ways of optimising your pricing strategy, this guide will explore one of your options: value-based pricing. We’ll explain what value-based pricing means and the benefits, as well as downsides to using this strategy....   [tags: Pricing, Marketing, Value-based pricing]

Better Essays
1004 words (2.9 pages)

H&M Pricing and Retail Strategy Essay examples

- Pricing and Retail Strategy of H&M Hennes & Mauritz (H&M) is a Swedish clothing retail company. The company was founded by Erling Pesson in 1947. The first H&M store was opened in Vaesteras, Sweden in 1947. The mission of H&M is to offer fashion and quality at the best price where “quality includes ensuring that products are manufactured in a way that is environmentally and socially sustainable” (H&M, vision & policy, n.d., para. 1). This essay is to highlight the current market analysis, pricing strategy, retail strategy, and competitive advantage analysis of the company....   [tags: Company History, Retail, Strategy]

Better Essays
1205 words (3.4 pages)

Market Skimming Pricing Strategy At Samsung Essay

- Market Skimming Pricing Strategy This is a strategy that is executed when launching highly priced commodities. It is aimed at maximizing profits by charging a higher price initially to the first customers. With time the price is lowered gradually to attract more consumers to purchase it. Companies will use this strategy to capitalize on those consumers that have the will of spending on a product that has cutting edge technology. Samsung products in the market are fairly competitive and are one of the best in the market....   [tags: Marketing, Pricing, Price skimming, Promotion]

Better Essays
992 words (2.8 pages)

Pricing Strategy for Business Markets Essay

- Pricing Strategy for Business Markets Pricing decisions cannot be made in a vacuum because of inherent tradeoffs between other marketing mix elements, pricing will depend on other product, distribution, and promotion decisions. Pricing can never compensate the poor execution of the other elements of the marketing mix but ineffective pricing can prevent the successful efforts of these in positive financial results. There is no one best practice for establishing the price of new products or modifying the price of existing products....   [tags: Business Marketing Strategy Analysis]

Free Essays
1502 words (4.3 pages)

Essay about Penetration Vs Skimming Pricing Strategy

- The pricing strategy for a new product should be developed so that the desired impact on the market is achieved while the emergence of competition is discouraged. Two basic strategies that may be used in pricing a new product are skimming pricing and penetration pricing. Skimming Pricing Skimming pricing is the strategy of establishing a high initial price for a product with a view to “skimming the cream off the market” at the upper end of the demand curve. It is accompanied by heavy expenditure on promotion....   [tags: Economics Pricing Business]

Free Essays
1597 words (4.6 pages)

Pricing Strategies Essay

- "Flanking in a Price War" discusses some of the strategies utilized by retail grocery chains, wholesalers, and co-operatives within the Quebec Grocery Industry. Pricing strategies are the main focus of this article. It outlines both successful and non-successful pricing tactics. In addition, it emphasizes the importance of considering all pricing options, through price experiments, before deciding upon a pricing strategy. It tells of the decline of an industry leader, Steinberg Inc. Steinberg Inc....   [tags: Business Pricing Strategy]

Free Essays
1215 words (3.5 pages)