It is crucial to know consumers’ price sensitivities when setting up the price of one particular product. Price is the consumers’ perceived cost, such as money and cost. Marketing strategies should be made according to the price sensitivity and products perceived differences.
The model above is helpful when you choose the marketing strategy.
- A commodity strategy : Efforts should be exerted to increase the firm’s market share thereby lowering marginal costs.
- A transitional strategy : Emphasize the quality of your product, but be ready to respond to competitor product improvements that attract customers
- A hybrid strategy : You should avoid price wars and talk quality.
- A specialty strategy : You should initiate or continue efforts to differentiate your offering.