Assignment 2nd 561 Marketing Theory

Department of Business Administration
Block No. 13, Sector H-8, Allama Iqbal Open University, Islamabad.
Marketing Theory & Practice (561)

Assignment No. 02
Submitted to:
Mr. M. Saeed
House No. 297, Street No. 03, Margalla Town, ISLAMABAD (0321-516 1337)
Submitted by:
Muhammad Hammad Manzoor MBA (HRM) 1st Semester
Roll No. 508195394 508, 5th Floor, Continental Trade Centre (CTC) Block 08, Clifton, KARACHI (0321-584 2326, 0322 555 5901)
ACKNOWLEDGEMENT
All praises to Almighty Allah, the creator of the Universe who blessed me with the knowledge and enabled me to complete this research. I feel great pleasure and honor to express my sincere gratitude and heartfelt thanks to my worthy subject faculty member Mr. M. Saeed Sab, for his guidance, encouragement and friendly attitude during the present study and throughout the period of M.B.A (Semester I).
I pay my thanks to all the Faculty of the Department & AIOU Karachi Campus Staff for their kind support, constructive criticisms and real encouragement. I wish to thank Ms. Zehra Jabeen for valuable discussions and knowledge sharing during the completion of this project. I further wish to record my thanks to all my students, class fellows, well wishers and especially Cera-e-Noor Management Ms. Shazia Lakhani (Manager Marketing), Mr. Khizar Iftikhar, Khurram Shahzad, Rehan Hassan, Sohail, Waleem, Javed for their help, valuable suggestions, whole hearted cooperation and prayers.
Finally, I owe all my academic success and progress in life to my loving parents and sisters, whose affection, endless prayers, good wishes and inspiration remained with me for higher ideals of life.
M. Hammad Manzoor
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By: M. Hammad Manzoor, MBA HRM-IV, 508, 5th Floor, Continental Trade Centre (CTC), Clifton 08, Karachi. (Roll No. 508195394)
ABSTRACT
The study had been carried out by keeping in mind about the pricing strategies and price setting techniques for the sake of an organizational, in which the planning different strategies has to be opted as input that can help us out for continues progress of the Study Firm (Cere-e-Noor) Cera-e-Noor (Karachi) has been selected for the sake of the data analysis and working on its merits and demerits, the methodology includes marketing targets, marketing strategies used for designing the pricing methods on the basis of the data base provided by Cera-e-Noor . SWOT analysis had been carried out and conclusion followed by recommendations had been made in this regards.
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Sr. No.
1
Contents Description
Introduction
What is Bench Pricing? Questions Involved in Pricing? Explanation of Pricing
Page No.
5-6
Review of Literature
Pricing Policy Factors What influence the price sensitivity? What influence the price elasticity? Price Quality Strategies Setting a pricing method Company Profile Data Collection
7-17
3 4
Cera-e-Noor Ceramics
18-25 26
Data Analysis
Demerits and Deficiencies Merits & Strengths
Recommendations
27
References
28
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Marketing Theory & Practice (561) Introduction

What is Pricing?
Pricing is the process of determining what a company will receive in exchange for
its products. Pricing factors are manufacturing cost, market place, competition, market condition, and quality of product. Pricing is also a key variable in microeconomic price allocation theory. Pricing is a fundamental aspect of financial modeling and is one of the four Ps of the marketing mix. The other three aspects are product, promotion, and place. Price is the only revenue generating element amongst the four Ps, the rest being cost centers. Pricing is the manual or automatic process of applying prices to purchase and sales orders, based on factors such as: a fixed amount, quantity break, promotion or sales campaign, specific vendor quote, price prevailing on entry, shipment or invoice date, combination of multiple orders or lines, and many others. Automated systems require more setup and maintenance but may prevent pricing errors. The needs of the consumer can be converted into demand only if the consumer has the willingness and capacity to buy the product. Thus pricing is very important in marketing.
Questions involved in Pricing?

Pricing involves asking questions like:
How much to charge for a product or service? This question is a typical starting point for discussions about pricing, however, a better question for a vendor to ask is - How much do customers value the products, services, and other intangibles that the vendor provides. What are the pricing objectives? Do we use profit maximization pricing? How to set the price?: (cost-plus pricing, demand based or value-based pricing, rate of return pricing, or competitor indexing) Should there be a single price or multiple pricing? Should prices change in various geographical areas, referred to as zone pricing? Should there be quantity discounts? What prices are competitors charging? Do you use a price skimming strategy or a penetration pricing strategy? What image do you want the price to convey? Do you use psychological pricing? How important are customer price sensitivity (e.g. "sticker shock") and elasticity issues?
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Can real-time pricing be used? Is price discrimination or yield management appropriate? Are there legal restrictions on retail price maintenance, price collusion, or price discrimination? Do price points already exist for the product category? How flexible can we be in pricing? : The more competitive the industry, the less flexibility we have. o The price floor is determined by production factors like costs (often only variable costs are taken into account), economies of scale, marginal cost, and degree of operating leverage o The price ceiling is determined by demand factors like price elasticity and price points
Pricing Bring in Revenues?

This is the only element in the marketing mix that brings in the revenues. All the rest are costs Price communicates the value positioning of the product.
A company must set its price in relation to the value delivered and perceived by the customer. Price = Cost + Profit
Pricing Policy Factors:

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Selecting the pricing objective Determining demand Estimating costs Analyzing competitors costs, prices, offers Selecting a pricing method Selecting the final price
Pricing Objectives:
The company first decides where it wants to position its market offering. objective could be:The
PRICING OBJECTIV ES
Survival
Maximize Current Profit
Maximize Market Share
Maximize Market Skimming
Product Quality Maximize Market Share Leadershi p
The firm's pricing objectives must be identified in order to determine the optimal pricing. Common objectives for optimal prices may include the following:
Current profit maximization - seeks to maximize current profit, taking into account revenue and costs. Current profit maximization may not be the best objective if it results in lower long-term profits. Current revenue maximization - seeks to maximize current revenue with no regard to profit margins. The underlying objective often is to maximize longterm profits by increasing market share and lowering costs. Maximize quantity - seeks to maximize the number of units sold or the number of customers served in order to decrease long-term costs as predicted by the experience curve. Maximize profit margin - attempts to maximize the unit profit margin, recognizing that quantities will be low. Quality leadership - use price to signal high quality in an attempt to position the product as the quality leader.
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Partial cost recovery - an organization that has other revenue sources may seek only partial cost recovery. Survival - in situations such as market decline and overcapacity, the goal may be to select a price that will cover costs and permit the firm to remain in the market. In this case, survival may take a priority over profits, so this objective is considered temporary. Status quo - the firm may seek price stabilization in order to avoid price wars and maintain a moderate but stable level of profit.
For new products, the pricing objective often is either to maximize profit margin or to maximize quantity (market share). To meet these objectives, skim pricing and penetration pricing strategies often are employed. Joel Dean discussed these pricing policies in his classic HBR article entitled, Pricing Policies for New Products.
Determining Demand:
Each price will lead to a different level of demand and have a different impact on a companys marketing objectives. Demand and price are inversely related i.e. Higher the price, lower the demand Company needs to consider : Price sensitivity Price elasticity of demand
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What influence price sensitivity?

Shared cost ( part of cost is borne by other party ) Sunk investment (product used is required as a complement to earlier purchase ) Inventory effect ( buyers cannot store the product ) Items bought more frequently ( more sensitive ) / infrequently ( less sensitive) Unique value effect ( quality , prestige or exclusiveness ) Substitute awareness by buyers Difficult comparison by buyers End benefit ( expenditure small part of total income ) Total expenditure ( purchase cost is insignificant compared to the cost of end product ) Low cost items (less sensitive ) / high cost items ( more sensitive )
What is price elasticity?

This determines the changes in demand with unit change in price; If there is little or no change in demand, it is said to be price inelastic. If there is significant change in demand, then it is said to be price elastic.
Demand is likely to be less elastic when:

There are few or no substitutes Buyers readily do not notice the higher price Buyers are slow to change their buying habits Buyers think that the higher prices are justified
Price Quality Strategies:

One of the four major elements of the marketing mix is price. Pricing is an important strategic issue because it is related to product positioning. Furthermore, pricing affects other marketing mix elements such as product features, channel decisions, and promotion. While there is no single recipe to determine pricing, the following is a general sequence of steps that might be followed for developing the pricing of a new product: 1. Develop marketing strategy - perform marketing analysis, segmentation, targeting, and positioning. 2. Make marketing mix decisions - define the product, distribution, and promotional tactics.
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3. Estimate the demand curve - understand how quantity demanded varies with price. 4. Calculate cost - include fixed and variable costs associated with the product. 5. Understand environmental factors - evaluate likely competitor actions, understand legal constraints, etc. 6. Set pricing objectives - for example, profit maximization, revenue maximization, or price stabilization (status quo). 7. Determine pricing - using information collected in the above steps, select a pricing method, develop the pricing structure, and define discounts. These steps are interrelated and are not necessarily performed in the above order. Nonetheless, the above list serves to present a starting framework. Marketing Strategy and the Marketing Mix Before the product is developed, the marketing strategy is formulated, including target market selection and product positioning. There usually is a tradeoff between product quality and price, so price is an important variable in positioning. Because of inherent tradeoffs between marketing mix elements; pricing will depend on other product, distribution, and promotion decisions. Estimate the Demand Curve Because there is a relationship between price and quantity demanded, it is important to understand the impact of pricing on sales by estimating the demand curve for the product. For existing products, experiments can be performed at prices above and below the current price in order to determine the price elasticity of demand. Inelastic demand indicates that price increases might be feasible. Calculate Costs If the firm has decided to launch the product, there likely is at least a basic understanding of the costs involved, otherwise, there might be no profit to be made. The unit cost of the product sets the lower limit of what the firm might charge, and determines the profit margin at higher prices. The total unit cost of a producing a product is composed of the variable cost of producing each additional unit and fixed costs that are incurred regardless of the quantity produced. The pricing policy should consider both types of costs.
Environmental Factors
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Pricing must take into account the competitive and legal environment in which the company operates. From a competitive standpoint, the firm must consider the implications of its pricing on the pricing decisions of competitors. For example, setting the price too low may risk a price war that may not be in the best interest of either side. Setting the price too high may attract a large number of competitors who want to share in the profits. From a legal standpoint, a firm is not free to price its products at any level it chooses. For example, there may be price controls that prohibit pricing a product too high. Pricing it too low may be considered predatory pricing or "dumping" in the case of international trade. Offering a different price for different consumers may violate laws against price discrimination. Finally, collusion with competitors to fix prices at an agreed level is illegal in many countries.
Skimming Skim pricing attempts to skim the cream off the top of the market by setting a high price and selling to those customers who are less price sensitive. Skimming is a strategy used to pursue the objective of profit margin maximization. Skimming is most appropriate when:

Demand is expected to be relatively inelastic; that is, the customers are not highly price sensitive. Large cost savings are not expected at high volumes, or it is difficult to predict the cost savings that would be achieved at high volume.
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The company does not have the resources to finance the large capital expenditures necessary for high volume production with initially low profit margins.
Penetration Penetration pricing pursues the objective of quantity maximization by means of a low price. It is most appropriate when:

Demand is expected to be highly elastic; that is, customers are price sensitive and the quantity demanded will increase significantly as price declines. Large decreases in cost are expected as cumulative volume increases. The product is of the nature of something that can gain mass appeal fairly quickly. There is a threat of impending competition.
As the product lifecycle progresses, there likely will be changes in the demand curve and costs. As such, the pricing policy should be reevaluated over time. The pricing objective depends on many factors including production cost, existence of economies of scale, barriers to entry, product differentiation, rate of product diffusion, the firm's resources, and the product's anticipated price elasticity of demand.
Setting a Pricing Method

There are following pricing methods. 1. Cost Based Pricing: In the simplest form of cost based pricing, the seller first determines the total costs of producing one unit of the product. Seller then adding a standard markup to cover additional costs such as insurance or interest and profit. The total of the costs and of the markup is the selling price of the product. To determine per unit cost seller must have the information of total costs and expected unit sales. Suppose the manufacturer has the following Costa and sales expectations Variable Cost per Unit Fixed Cost Expected Unit Sales Rs. 10 Rs. 300000 Rs. 50000
Then the manufacturers cost per unit is given by: Unit Cost = variable cost + Fixed Cost / Unit Sales Unit Cost = 10 + 300000/50000= Rs. 16
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Now if manufacturer want to earn a 20 percent markup on sales. The manufacturer markup price is given by: Markup Price = Unit Cost / 1 - Desired Return on Sales Markup Price = 16/ 1 - 02 = Rs. 20 The manufacturer would charge Rs. 20 of one item, where his profit is Rs. 4 per unit. 2. Breakeven Analysis and Target Profit Pricing Another cost oriented pricing approach is breakeven pricing, or a variation caller target profit pricing. Breakeven analysis is one way to consider both market demand and cost in price determination is to use breakeven analysis to calculate breakeven point. A break even point is that quantity of output at which total revenue equals total costs, assuming a certain selling price. Sales exceeding the break even point results in a profit on each additional unit. The higher sales are above the break even point and sales below the break even point result in loss to the sales. Break even point may be found with this formula: Break Even Pint Units = Now Where Fixed Cost Variable Cost Price Is Therefore BEF unit = = = = Rs. 30000 Rs. 10 Rs. 20 300000/21-10 = 30000 Total Fixed Cost / Price - Variable Cost
Now if the manufacturer wants to make a target profit, must sale more than 30000 units at Rs. 20 Each. Break Even Assumption When the following are true the exact break even can be determined. 1. The selling price of the product remains the same throughout the period. 2. Fixed costs and variable costs are separated. 3. Fixed and variable costs do not change during the period. 4. Production and Sales during the period are equal.
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3.
Perceived Value Pricing Whatever, the cost incurred and percent of markup to be charged as profit and set the price, mostly number of companys base price on the customers perceived value? The watch the buyers perceptions of value as the key to pricing. Therefore, advertising and field force companies buildup perceived value in buyers mind. Suppose if they need seller is offering to his customers a premium that if they need a delivery within one week instate of two weeks which is standard offer then buyer will have to pay more. Here, we can quote an example off any courier services company like T.C.S. If they ask the customer that our salesman will get the packet from your office only if you pay Rs. 10 more than the standard price Rs. 90. If customer delivers at T.C.S. office him or her say. Now when seller will offer superior service and value as well as any warranty, a y durability, or superior reliability more than the competitor buyer would like to accept the sellers offer and will ready to pay extra value because the perceives about products bitterness.
4.
Competition Based Pricing When one firms product is valued more by customers and capturing market share more than major competitor than the firm might charge the same, or more than its major competitors is called going rare pricing. In contrast competition based pricing is also used when firms bid for jobs. Using sealed bid pricing, a firm basis its price on how it thinks competitors will price rather than on its own costs or on the demand. The firm wants to win a contract, and winning the contract requires pricing lower than other firms.
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Selecting the Final Price

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Pricing methods narrow the range from which the company must select its final price.
Price Adjustment Strategies

Psychological Pricing A pricing approach that considers the psychology of price and not simply the economics, the price is used to say something about the product let us discuss some examples of psychological pricing. Old Pricing Many sellers believe that consumers respond more positively to odd number prices like Rs. 599 than to whole round figure like Rs. 600. Odd pricing is the strategy of selling prices at odd amount that are slightly below an even or whole number. Multiple Unit Pricings Many retailers (and specially supermarkets) practice multiple unit pricing. That is they set a single price for two or more units. For example, two related products banded together such as a tooth brush and tooth paste for a price of one. Especially for products with rapid turnover, this strategy can increase sales. Consumers who see the single price, and who expect eventually to use more. Prestige Pricing Prestige pricing is the strategy of getting a very high price to project an aura of quality and status. Because high quality items are generally more expensive then those of average quality, many buyers believe that high price means high quality (and vice versa). High priced products such as Rolex Watches and Schools like Beacon, City, tends to attract quality and prestige conscious people. Price Lining Price lining is selling goods only at certain predetermined prices. For example, a store may sell mens ties only at Rs. 50 and Rs. 75. Actually ties of the shop both are of same category but the difference pushes to sale more ties of Rs. 75. This strategy is widely used in clothing, cosmetics and boutiques.
Geographical Pricing
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Geographical pricing involves the company in deciding how to price its products to different customers in different parts of country or world, let us discuss some geographical pricing strategies. FOB origin Pricing FOB stands for free on board, seller quotes the selling price at the point of production and buyer selects the mode of transportation and pays all freight costs. In this strategy seller does not pay any of the freight costs. The seller pays only for loading the shipment aboard and each customer pickup its own cost. Uniform Delivered Pricing This strategy is the opposite of FOB pricing. Here, the company charges the same price plus freight to all customers, regardless of their location. The freight charge is set at the average cost. Zone Pricing A geographical pricing strategy in which the company sets up two or more zones. All customers within a zone pay the same total price; the more distant the zone, the higher the price. Suppose one zone is in Karachi and other zone is in Lahore Punjab and point of production is in Karachi Sindh. Therefore, customers in Sindh pay less than customers in Punjab. Freight Absorption Pricing In freight absorption pricing strategy the seller absorbs all or part of the actual freight charges in order to get the desired business. The seller might reason that if it can get more business, its average costs will fall and more than compensate for its extra freight cost freight absorption pricing is used for market penetration and to hold on the increasingly competitive market.
Price Discount and Allowance Pricing

Cash Discount A cash discount is a price reduction to buyers who buy and pay their bills promptly. A typical example is 2/10, net 30 which means that although payment is due within 30 days, the buyer can deduct 2 percent if the bill is paid within 10 days. The discount must be granted to all buyers meeting these terms such discounts are customary in many industries and help to improve the sellers cash situation and reduce bad depts. And credit allocation costs.
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Seasonal Discount A seasonal discount is a price reduction to buyers who buy goods out of season. Suppose buying of refrigerator in December. In winter hotels and motels, and airlines offer seasonal discount in their slower selling periods. Seasonal discount allow the seller to keep production steady during an entire year. Allowance Allowances are another type of reduction from the list price. For example, trade in allowances are price reductions given for turning in an old item when buying a new one. Trade in allowance are most common in the automobile industry but are also given for other durable goods. Discriminatory Pricing Companies often adjust their basic price to accommodate fidderences in customer, image and product. Customer Segment Pricing Different customer groups are charged different for the same product. For example, PIA charges one fair for adult, one for child, and one for infant. Similarly museums often charge a lower admission fee to students and senior citizen. Similarly businessmen charge low price to regular and high to regular customers. Image Pricing Some companies price this same product at two different levels based on image difference. Suppose, a perfume manufacturer can put the perfume in one bottle, give it a name and image, and price it Rs. 300 it can put the same perfume in another bottle with a different name and image and price it at Rs. 500. Product for Pricing Different versions of the product are priced differently. For example, Ahmads jam in 1000 grams pack price is 90 rupees; it takes a same jam and packing 500 gram for 50 Rupees. Location Pricing The same product is price differently at different locations even though the cost of offering at each location is the same. Suppose, a theater varies its seat according to audience preference for different location. Time Pricing Prices are varied by season, day, and hours. Different price at different time for public utilities is an example.
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Practical Study of
Cera-e-Noor
http://www.cera-e-noor.com/
Manufacturer of finest tableware

Company Portfolio Cera-e-Noor plant located in the industrial area of city of Hub in Lasbela, Balochistan province of Pakistan, was acquired by the Hashoo Group in the year 2000. It is a stateof-the-art facility for the manufacture of crockery (tableware). The plant was designed and commissioned with the collaboration of French ceramic giant, Bernardaud Liamoges and technical/engineering expertise from other major players in the French ceramic industry such as Ceric and Cerlim. Notable features of the manufacturing unit are automatic plate lines, universal jiggering machines capable of producing extra large sized platters, PLC controls and highly advanced shuttle kilns for both gloss and biscuit firing. A Ceramics manufacturing company, Cera-e-Noor specializes in hospitality and domestic grade porcelain crockery and table ware. The state of the art facility included the latest technology and processes including automated lines, universal machines capable of producing extra large size plotter, PLC controls and highly advanced Shuttle kens of both glass and biscuit. Cera-e-Noor uses imported China Clay vitrified at extremely high temperatures to produce hardwaring and scratch resistant porcelains crockery and table ware in different grades. Cera-e-Noor porcelain is highly durable and four times stronger than conventional ceramics table ware and is microwave and diswasher sale. Limited addition customs design and grids can be commissioned suitable for Government or Corporate levels use. All products are entirely free from harmful material and exhibits excellent thermal stability. Apart from meeting the industry needs of the Hashoo Group, Care-e-Noor also caters to the needs of other customers in the commercial and domestic sectors as well as international markets at easy realistic prices.
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Being the only facility in Pakistan capable of manufacturing hard ceramic product in large quantities Care-e-Noor is committed to total customer satisfaction by consistently providing innovative and unmatched quality products through team efforts.
VISION OF THE COMPANY: We strive to be bench-marked against the best in the tableware industry. Our aim is to exceed our customer's expectations ensuring them of highest standards of service levels and unmatched product quality. FUTURE PLANS: In the future competition will increase in this market and there will be large availability of Chinese product at relatively low price. Customer will become brand & quality conscious. In future we plan to expand our product line by introducing more categories, designs & varieties in both casual & formal ware. We also plan to go beyond the national boundaries and market of products worldwide.
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Genuine Hard Porcelain

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Cera-e-Noor product line is unique it is the only facility in the country, manufacturing products of hard porcelain from imported quality China clay. Durable Decoration Due to extremely controlled temperature & atmospheric conditions in the fast firing fully automatic tunnel Kiln our decorations fuse with the glaze, which gives high degree of durability even after high dishwasher use. Domestic and Institutional Product Ranges Built-in versatility in our production systems allows us to offer both the fine tableware for home dinning & the tough thick ware for the institutional client. We can custom make company logos as well as design transfers according to specifications. Realistic Prices High speed, high volume production facilities combined with experienced technical staff ensures quality products at realistic prices. Try us - you will be pleasantly surprised. Free of Harmful Materials Strict quality control in the selection of raw materials for the composition is maintained to avoid hazardous material which can be injurious to health. High Durability Cera-e-Noor porcelain is vitrified at an extremely high temperature, making it four times stronger than conventional ceramic tableware and is dishwasher safe. Scratch Resistant The hardness of the Cera-e-Noor glazed surface can withstand tough commercial use with high resistance to scratching/silver marking.
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Marketing Theory & Practice (561) METHODOLOGY USED:

Cere e Noor holds the strategy to facilitate the whole nations and compete the international standards (i.e. Novita, Rovalden etc) and always is in the opinion to grasp the market from Upper Class to Lower Class.
Marketing Targets: Turn Over Benchmarks

To achieve a target of PKR 222 million (2 million pieces) within the 1st year To achieve a target of PKR 400 million (4 million pieces) within the 2nd year To achieve a target of PKR 1 billion (8 million pieces) within the 3rd year
Profit Oriented Benchmarks

To achieve profit at the rate of 2% within the 1st year 2007-08 To achieve profit at the rate of 4% within the 2nd year of 2008-9 To achieve profit at the rate of 8 % within the 3rd Year of 2008-09
Sales Benchmarks
To achieve a target Expand the number To achieve a target Expand the number To achieve a target Expand the number net sales of Rs. 222 million within the1st year of 2007-08 of dealers by 10 % net sales of Rs. 400 million within the 2nd year of 2008-09 of dealers by 30 % net sales of Rs. 1billion within the 3rd year of 2009-10 of dealers by 50 %
MARKETING STRATEGIES: PRODUCT LINE PRICING:

Cere e Noor believe in Product line pricing and categories the three (03) choices for the lower class to higher class customers. The company utilized same imported material for the porcelain with different features at different prices. The greater the features and the benefit obtained the greater the consumer will pay. This form of price discrimination assists the company in maximizing turnover and profits.
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Marketing Theory & Practice (561) LOWER Category - Product Line Pricing:
Cere e Noor holds the low earning customer in the lower category and hold the reasonable prices at Rs. 10, 000 / dinner set (example). The customer prevails ease to purchase the product. Since the raw material used by the Cere e Noor is same but with the different variety of designs colors and manufacturing. The customer enjoys the international standards of Cere e Noor at the reasonable minimal prices.
MIDDLE Category - Product Line Pricing:

Cere e Noor holds the middle earning customer in the middle category and hold the reasonable prices at Rs. 13, 000/- to 20, 000 / dinner set (example). The customer prevails ease to purchase the product. Since the raw material used by the Cere e Noor is same but with the different variety of designs colors and manufacturing used better than the Lower Category for the medium range with better variety in comparison with the lower category.
HIGHER Category - Product Line Pricing:

Cere e Noor holds the higher earning customer in the middle category and hold the reasonable prices at Rs. 20, 000 /- to Rs. 100, 000/- dinner set (example). The customer prevails ease to purchase the product at international standard in local market (Pakistan) as compare to the international standard. Since the raw material used by the Cere e Noor is same but with the different variety of designs colors and manufacturing used better than the Lower & Medium Category for the Upper range with better variety in comparison with the lower & Medium category. In higher Category, Cere e Noor makes a big difference as compare to the medium and lower class and holds a lot of fancy and attractive design & varieties in Higher Category.
BUNDLE PRICING:
Cere e Noor holds some time Bundle Pricing Option to launch their products available in stock. The Cere e Noor bundles a group of products at a reduced price. Common method used is buy one and get one free promotions.
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Marketing Theory & Practice (561) PROMOTIONAL PRICING:

Cere e Noor holds some time offer promotional offers in the form of the coupon, gifts, mug pot set, tea pot set etc. For promotional marketing, Cere e Noor uses the MASALLA TV CHANNEL, in which renowned Cheff and celebrities have to hire who are responsible for comapaign at Masalla TV during the morning shows. They generally have live call system in the morning show and offer the coupons to the participants and get them onboard for onward for future lucky draw. Lucky draw is generally held at the Cere e Noor famous outlets, like THE FORUM shopping mall or at Gul Plaza and Senior Executive or Famous Celebrities are invited for balloting results of the lucky draw and gifts are distributed.
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Marketing Theory & Practice (561) Merits, Demerits, Strengths and Deficiencies: Merits & Strengths:
Premier local manufacturer of porcelain tableware. Part of the elite Hashoo group -the owners and operators of two leading chains of hotels namely Marriott and Pearl Continental Ability (knowledge, skills and facility) to manufacture hard porcelain.
Demerits and Deficiencies:

Plant is geared towards small volumes and labor intensive manufacturing resulting high. Cost of manufacturing Quality is acceptable but consistency needs to be ensured. Further improvement in quality is necessary to compete with top International brands. Lack of Decal Development Facility. Lack of original designs Lack of brand awareness in relevant markets Lack of proper HRD( succession planning, Training & Development) Lack of Planning strategy for pricing.
Opportunities:
Huge growing domestic market Growing purchasing power of people within the economy More and more consumers are becoming brand conscious Modern lifestyles markets are growing.
Threats:
Growing Manufacturing Power of China (they can do reasonable quality at low cost) Increasing energy costs.(Oil & Electricity) Increasing prices of raw material Political stability is at a decline.
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Marketing Theory & Practice (561) Recommendations:

Enhance the Product quality standards Enhance the planning strategy for pricing. New design techniques need to be incorporated in better way to compete the international standard in better way. Redesign according to the market insight survey carried out by Cere e Noor marketing team Pricing strategies should be revised also for psychological pricing approach. Enhance the manufacturing plant capacity to get the maximum number They should try to come up with the maximum number for production in order to reduce their cost in External Benchmarking. Enhance the brand design Enhance HRD to meet the appropriate professional needs for onward competition Administration department needs to address for of hiring experienced professionals of the relevant trade. The emphasis of the company emphasized is work progress, nor on the personality grooming of an individual, which could be helpful for company operation smooth conduction and helping out for better prospectivity in the form of his personal growth and motivation to company. More pricing survey should be incorporated within the market and among the customer for better satisfaction of the customer need and pricing.
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References:
A special tribute and thanks to the following professionals of Cera-e-Noor for cooperating in providing data and fruitful assistance.
Name
Ms. Shazia Lakhani Muhammad Usman Javed
Designation
Manager Marketing Manager Marketing
Contacts
shazialakhani@hashoogropup.co m javd.u@ogil.com.pk
o o
o o o o
http://en.wikipedia.org/wiki/Pricing http://en.wikipedia.org/wiki/Pricing_strategies http://www.bized.co.uk/educators/1619/business/marketing/lesson/pricingstrat.htm http://www.netmba.com/marketing/pricing/ http://www.learnmarketing.net/price.htm http://www.vladvisors.com/images/PDF/VisionLink_Ten-Steps-BuildingEffective Incentive-Plan.pdf
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Mr. M. SAEED House. No. 297, Street No. 03, Margalla Town ISLAMABAD. (0321-516 1337)
M. Hammad Manzoor 508195394 # 508, 5th Floor, CTC Continental Trade Centre, Block-08 08, KARACHI. (0321Clifton 584 2326) Marketing Theory & Practice 02 0561
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Assignment 2nd 561 Marketing Theory

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Department of Business Administration

Marketing Theory & Practice (561)

Marketing Theory & Practice (561)

Marketing Theory & Practice (561)

Marketing Theory & Practice (561)

Marketing Theory & Practice (561) Introduction

Questions involved in Pricing?

Marketing Theory & Practice (561)

Pricing Bring in Revenues?

Pricing Policy Factors:

Marketing Theory & Practice (561)

Maximize Current Profit

Maximize Market Share

Maximize Market Skimming

Product Quality Maximize Market Share Leadershi p

Marketing Theory & Practice (561)

Marketing Theory & Practice (561)

What influence price sensitivity?

What is price elasticity?

Demand is likely to be less elastic when:

Price Quality Strategies:

Marketing Theory & Practice (561)

Marketing Theory & Practice (561)

Marketing Theory & Practice (561)

Setting a Pricing Method

Marketing Theory & Practice (561)

Marketing Theory & Practice (561)

Selecting the Final Price

Marketing Theory & Practice (561)

Price Adjustment Strategies

Marketing Theory & Practice (561)

Price Discount and Allowance Pricing

Marketing Theory & Practice (561)

Marketing Theory & Practice (561)

Manufacturer of finest tableware

Marketing Theory & Practice (561)

Marketing Theory & Practice (561)

Marketing Theory & Practice (561)

Genuine Hard Porcelain

Marketing Theory & Practice (561)

Marketing Theory & Practice (561) METHODOLOGY USED:

Marketing Targets: Turn Over Benchmarks

Profit Oriented Benchmarks

MARKETING STRATEGIES: PRODUCT LINE PRICING:

MIDDLE Category - Product Line Pricing:

HIGHER Category - Product Line Pricing:

Marketing Theory & Practice (561) PROMOTIONAL PRICING:

Demerits and Deficiencies:

Marketing Theory & Practice (561) Recommendations:

Marketing Theory & Practice (561)

Marketing Theory & Practice (561)

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