Product & Pricing

Strategic options in the price – and product policy product lines and product families, product lines are product groups that exhibit similarities from an enterprise perspective. So, a dairy operation can produce dairy products for consumers and at the same time supply also processing buildings and other large customers. Product families include a range of products, which are perceived as belonging together. Often sold these products under a common brand. The breadth of product portfolio, program breadth and depth of the program indicates the number of the offered side by side product lines. A dairy operation can offer, for example, other types of dairy products, such as different types of milk, whey drinks, and fruit yogurt in addition to milk. The depth of the program identifies the different meeting customer needs product variations in a product line (E.g., flavors with fruit yogurt). Not always, product variation, product differentiation must be developed completely new products.

Product variations refer to changes or improvements in the design of one already sold in the market product without changes the function of the product. New models of a famous car brand that come at regular intervals on the market are an example of this. Product differentiation refers to the sale of a new product that represents a variation of the existing products. In the automotive industry, the development of a convertible version of a popular brand of car is a good example for product differentiation. A relaunch may refer to a concentration of marketing activities on a product relaunch, new to awaken an interest in this. The relaunch can have either a product variation or a new advertising approach to the content.

Strategic options in pricing policy Skimming-(Abschopfungs-)Strategie the skimming strategy assumes, that one is ready for enough large numbers of consumers to pay a high price for the product, to a new and special”product to have. The company is therefore a high price at the beginning of the launch, to higher profits to achieve the sales of the product to the consumer. This strategy is used only at the beginning of the market introduction phase (until the time other companies make similar products on the market). Penetrations-(Durchdringungs-)Strategie the penetration strategy contrary to do so on a particularly wide layer of customer and tries to attract them with very low prices. Often, companies sell their products during the introduction phase, even lower than the cost price to convince right from the outset a huge consumer shift from buying. The price differentiation is attempting to determine different prices for a product according to the consumer group, also customized rates can be offered for different quantities, product designs and uses of the product. The condition policy deals with the payment terms offered to the consumer. All contractually fixed the remuneration of services (price) and possible agreements are subject Discounts (discounts). Payment terms refer to dates of payment, delivery and withdrawal conditions and discounts. Discounts are discounts granted on the basis of a specific event (quantity discounts, wholesale discounts, stock clearance discounts and staff discounts). Also credits and loans, their duration and repayment are treated in the framework of terms and conditions. Ing. Philipp BREIER