Factors Affecting Pricing Decisions
|✅ Paper Type: Free Essay||✅ Subject: Marketing|
|✅ Wordcount: 915 words||✅ Published: 11th Jan 2018|
The market type of Lux is monopolistic competition. This type of market has many buyers and sellers due to the low barrier of entrance into the market and this makes the market more competitive. Example of the competitors like Dettol, Safeguard, Protex and others will sell differentiated products of soaps, at different prices in the market.
The factors that affect the pricing decisions of Lux are the demand of the market and the taste of customers. In order to get hold of the heart of the consumer, Lux Soft Touch Beauty Bar has clearly stated its target market – beauty soaps. Literally, Lux Soft Touch Beauty Bar is more towards female market.
From the official website of Lux, it stated that
“Luxuriate in the sensation of moisturized skin with LUX Soft Touch liquid soap & beauty bar, one of Lux’s coveted skin care beauty secrets. Enriched with the exclusive Silk Protein Extract and Cherry Cream, it forms a light creamy layer, which covers your skin, helping to hold in the moisture that dry skin needs. Like a goddess dressed in a silk gown, you’ll leave for the day with self-confidence, feeling elegant and in command.”
From the above-mentioned, we can clearly see that Lux Soft Touch Beauty Bar is more for female that provide protection to their skin and make their skin smoother after using it. This is different from the other ordinary soaps that declare on anti-bacterial. This makes the female consumers more loyal to Lux.
Since there are loyal customers on the market, the demand of will also increase or make a constant in the long run. And due to this, the price of Lux Soft Touch Beauty Bar will not confront to the huge changes of price in the market.
2.2.2 New Product pricing strategies
In order to extend the line for its new product to sell in the particular market, market penetration should be the new product pricing strategies of Lux in order to increase sales and demand in this competitive world.
To penetrate the market, Lux will not have any problem because it’s an existing brand with high reputation in the current market. But the following things should consider:
Penetrating the brand of Lux means adding some new and attractive features on the product and also taking into consideration the effective communication which will turn into a new value proposition for the product.
In order to increase more sales Lux should concentrate on the appropriate reduction of cost which will directly lead to gain leadership in price. Once price will be reduced more and more consumers will attracted to buy the particular product. Moreover by reducing the price of the particular soap Lux will again have growth in their product and it will be very helpful to survive in the competitive market.
Lux will also have to do product development for the product line extension and it will be done through by introducing new body wash soap with an existing name and it will also launch new products like introducing Lux face wash all this will ultimately lead to increase in their sales and again to grab the new target market audience for the product. This strategy not only to increase the profit for the company but also to produce new products in the existing market for brand awareness to the consumers which will have greater impact on the consumer to buy the particular product at very low price and again to boost the sale for the personal care product.
2.2.3 Product Mix Pricing Strategies
Lux is currently using product line pricing. Since Lux is a large brand, it manufactures many types of product. Therefore it needs to set price steps between various items in a product line based on:
Cost differences between products – The difference cost of products will affect the price of the products when market. The range of products includes beauty soaps, shower gels, bath additives, hair shampoos and conditioners.
Customer evaluations of different features – The customers of Lux are more on female. Therefore, Lux should always need to attract the attention of its target market to make sure they will consume the product of Lux.
Competitors’ prices – Lux are not only soap in the market, therefore it needs to take consider of the price of competitors when pricing its product. This will make a competitive advantage to Lux.
Besides, Lux is also using product bundle pricing. They combine the Lux soft touch beauty bar 3 in 1 and offer the bundle at a reduced price. Pricing bundles of products sold together.
2.2.4 Price Adjustment Strategies
The price adjustment strategies relate to all the strategies implemented by an organisation that takes into account the differences between customers and rapidly changing. Lux is using international pricing strategies. Lux is an international product and brand over 100 countries, so it’s priced differently for each of the countries. For example, the price of Lux in Malaysia is slightly expensive comparable to South Africa. This is because the economic level of South Africa is lower than Malaysia.
Besides, Lux also uses promotional pricing techniques. The normal bundle of Lux soft touch beauty bar is 3 in 1, but sometimes, in order to increase demand, Lux will make it into 4 in 1. This will increase the consumer consume more unit of Lux soft touch beauty bar when this promotion.
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