Contemporary Marketing (MindTap Course List)
Contemporary Marketing (MindTap Course List)
17th Edition
ISBN: 9781305075368
Author: Louis E. Boone, David L. Kurtz
Publisher: Cengage Learning
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Chapter 19, Problem 1ALR
Summary Introduction

To differentiate: Between a penetration pricing strategy and a skimming price strategy and under which condition is each most likely to be used.

The amount or value of funds that are required to buy a product is termed as price.

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Explanation of Solution

The difference between penetration pricing strategy and skimming pricing strategy is as follows:

Skimming pricing strategy: Is where they set a high price comparatively higher than the others. It is also known as market plus pricing.

Penetration pricing strategy: This strategy sets a lower price with respective to the competitor’s price in order to increase the demand and acceptance.

Under which condition is each most likely to be used is as follows:

Skimming pricing strategy is often used as a market entry price for distinctive product or services with low or no initial competition. When supply starts to exceed demand the beginning high price would be dropped.

Penetration pricing strategy is used when the product attains recognition in the market through customer sample purchase stimulated by its low price, marketers might raise the price to the level of competing goods.

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James Shoe Emporium, a retail brick and mortar shoe store caters to the higher income market in your country. However, the establishment has been experiencing falling revenue since the August 2024. The owner of the company believes that marketing and selling his shoes via the internet might be the solution. He has hired you to formulate an emarketing plan to do so.   You have decided to use the following e-marketing strategies (content marketing, email marketing, mobile marketing, online advertising and social media engagement). Why? State how you would manage ethical and legal issues in the digital environment.
James Shoe Emporium, a retail brick and mortar shoe store caters to the higher income market in your country. However, the establishment has been experiencing falling revenue since the August 2024. The owner of the company believes that marketing and selling his shoes via the internet might be the solution. He has hired you to formulate an emarketing plan to do so. Develop a background for James Shoe Emporium. Describe the following: location of the company – country and city/town, type of shoes sold and price, the target market. State why the owner is considering using e-marketing. What benefits can e-marketing bring?
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