Frozen Yogurts
Frozen Yogurts
Our company will adopt value-based pricing in setting our products price. Though the price is set by our marketing executives, customers are the ones deciding whether it is worth buying or not ultimately. In order to set the right price, we will take customer perceived value on our products into account. We will convince customers that our products are different and better. That is, our frozen yogurts worth more than they really pay for it. They are not only buying the product itself, but also buying “health”, “confidence” and “convenience”. Virtually, using value-based pricing in setting our products price is quite risky as it is difficult to estimate and measure customer perceived value on our products. Hence, our company sets a relatively low initial price for our products first and observes the customers’ response to our products continuously after we establish the stores. It is because even if customers do not assign a high value on our products initially, they are willing to try our frozen yogurts since it is relatively cheaper.
Undeniably, only by producing unique, differentiate yogurts can we win a large market share even if our competitors cut price. Hence, our pricing strategy is not blindly cutting price to stimulate sales and have price comparative advantage. As if our competitors cut price, it is difficult for us to keep enjoying price comparative advantage unless we also cut price. We need to focus on our quality control of yogurts as setting a low initial price is a strategy to attract large amount of customers when we first enter the market. We charge customers a comparatively lower price to encourage them to try our frozen yogurts. After we build up our brand name in China by providing them good quality of frozen yogurts, customers will assign more values on our products and hence we can charge a higher price according to their perceived values. Ultimately, our company will adopt high-low pricing when we gain popularity. We keep selling our products with a constantly high price but running frequent promotions to lower prices on selected items temporarily.
Besides, our pricing aims are to attract large number of customers, gain a large market share and build up our brand image quickly. In Shen Zhen, there are some brands which have already occupied part of the market shares. If our company wants to gain a place and survive there, setting a low initial price is a good option. As there are other competitors