Customers that seek value put a lot of pressure upon companies to alter prices in order to get the most benefit out of the organisation’s good or service (Armstrong, Adam, Denize, Volkov, Kotler, 2019). In order for companies to create customer value they must find the right price. There are three main pricing strategies that organisations utilise to create customer value these include price setting, cost-based pricing and value-based pricing (Armstrong, Adam, Denize, Volkov, Kotler, 2019). In the price setting strategy there is a floor price that is set by the production costs and a ceiling price which is set by the various perceptions that consumers have on product value, companies must research an abundance of external and internal factors such as supply and demand to find the right price (Armstrong, Adam, Denize, Volkov, Kotler, 2019). Cost-based pricing and value-based pricing are step by step strategies that allow companies to garner an understanding on how to price their products, the diagram below details the various steps.
The strategy that I would recommend for the Red Cross to utilise would be the price setting strategy. The price setting strategy is the most accurate and therefore would be advantageous to the group’s marketing plan. In order for it to be successful, research on many internal and external factors must be conducted. To understand the price ceiling consumers would have to be questioned about how they value the Red Cross’ services.
References: Armstrong, G. Adam, S. Denize, S. Volkov, M. Kotler, P. (2019). Principles of Marketing. Melbourne, Victoria. Pearson Australia.
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