abhishreshthaa
Abhijeet S
Price structure
As presented in the Heineken case, products can be positioned with a high price in one country and a low price in another.
This can be attributed to the pricing structure of international markets, viewed here as a major determinant of the products pricing policy.
Consider, the Bottled water market in Italy. The market over the last decade has consistently increased in comparison to other soft drinks markets.
Italian consumption of bottled water now ranks among the highest in Europe … with average prices in Italy around 25 per cent lower than in neighboring countries.
The demand decreased over the last two years for two reasons - firstly, the cool summer weather, and secondly, the industry has tended to use price to stimulate demand instead of other marketing techniques.
It is now thought that as the market is reaching maturity and prices are extremely low, demand cannot be further stimulated by lower prices with a high level of market concentration supporting this.
To highlight the importance of the markets average price, we look at the German company, Terme San Andrea in Italy. It is said that due to the reducing average Prices, its volumes fell by 40 per cent.
Pricing structure also refers to the below the line pricing promotions, such as money off vouchers. This is prominent in the French mustard market.
In this particular market there is “a high incidence of usage of below-the-line promotions such as money-off offers”, which is an influential component of the lower average price of the market.
The importance of special offers in price will always vary between countries
As presented in the Heineken case, products can be positioned with a high price in one country and a low price in another.
This can be attributed to the pricing structure of international markets, viewed here as a major determinant of the products pricing policy.
Consider, the Bottled water market in Italy. The market over the last decade has consistently increased in comparison to other soft drinks markets.
Italian consumption of bottled water now ranks among the highest in Europe … with average prices in Italy around 25 per cent lower than in neighboring countries.
The demand decreased over the last two years for two reasons - firstly, the cool summer weather, and secondly, the industry has tended to use price to stimulate demand instead of other marketing techniques.
It is now thought that as the market is reaching maturity and prices are extremely low, demand cannot be further stimulated by lower prices with a high level of market concentration supporting this.
To highlight the importance of the markets average price, we look at the German company, Terme San Andrea in Italy. It is said that due to the reducing average Prices, its volumes fell by 40 per cent.
Pricing structure also refers to the below the line pricing promotions, such as money off vouchers. This is prominent in the French mustard market.
In this particular market there is “a high incidence of usage of below-the-line promotions such as money-off offers”, which is an influential component of the lower average price of the market.
The importance of special offers in price will always vary between countries