Marketing
Environment
Simon Isrif,
438344, DIM1VC
09-01-2017
Week 2.7 Pricing
(The Illustrious
Agency, n.d.)
Are there any price-related promotions (such as price
discounts or multi-pack discounts) around your product?
Sennheiser does
not focus on promoting its products in a price-related way, their promotion is
more orientated on displaying the quality of the products. There are however
some price-related promotions in the form of price discounts in the various
retail and online stores in which the Sennheiser headphones are sold.
Which pricing tactics are being used for your product?
Sennheiser emphasizes
a premium quality standard for its products and they are therefore involved in
the non-price competition policy. Having the cheapest product in the headphones
market is not Sennheiser’s goal, instead the company strives to offer the ultimate
sound quality and undistorted listening enjoyment to its costumers (Sennheiser,
2016).
Which influence do other marketing mix elements have
on the price of your product?
The place/distribution marketing mix element
can influence the price of the products, if the selective or exclusive distribution
method is used, a higher price can be asked for the products. Consumers will be
prepared to spend more money because of the exclusive and premium status of
these products.
The promotion marketing mix element can also
influence the price of the products offer by Sennheiser. Premium prices are
often not mentioned in the advertisements, however it is in some cases, the
exclusivity associated with the premium price of the products can be included
in the advertisements to show the high status of the products. Higher priced
products also require a higher personal selling effort compared to lower-priced
products, a higher level costumer service is necessary to help potential buyers
that are hesitant due to the high prices (Dibb, Simkin, Pride, & Ferrell,
2016)
Describe whether your company does use price
differentiation.
It can be said
with quite certainty that Sennheiser uses price differentiation. Due to the varied
and broad customer base of the company a difference in the charged product price
is logical. Large business customers may be attracted with a lower price if an order
of higher quantity is placed and individual professional customers that are
interested in the Sennheiser products, like for example artists and DJ’s, may
get a personalized price based on their demands and the level of relationship and
loyalty they have with the company.
Estimate the price elasticity for your product.
Due to the availability
of substitute products (other headphone brands) and the premium nature, and relatively
low need of the product (not essential product) it can be estimated that the
price elasticity of Sennheiser headphones is high. A change in price can have a
dramatic effect on quantity demanded.
How can the manufacturer influence the consumer price?
Sennheiser is not
only the seller, but also the manufacturer of its own products. The consumer
price can be influenced by for example using a higher quality selection of
production materials for the production process or by a sudden increase in the overall
price of the current production materials and also by other factors involved in
the manufacturing process such as an increase in number or quality of the personnel
working in the manufacturing plants.
References
Dibb, S., Simkin,
L., Pride, W., & Ferrell, O. (2016). 20. In Marketing Concepts and
Strategies (7th ed.). Hampshire, United Kingdom: Cengage Learning EMEA.
The Illustrious
Agency.Retrieved from
http://www.illustriousagency.com/listing-of-services-pricing
Sennheiser.
(2016). SENNHEISER AT A GLANCE. Retrieved from
http://en-de.sennheiser.com/about-sennheiser-at-a-glance
