Introduction: Marketers must constantly look for ways to be socially responsible

Question

Introduction: Marketers must constantly look for ways to be socially responsible and to provide quality products at a price reasonable to their customers. This Newsweek Video case is an interview (two videos) with Jeff Kindler, Chairman of Pfizer, Inc. His interview responses offer insights into the benefits and challenges of social responsibility, pricing policies, and brand image in a diverse global marketing environment.

About Jeff Kindler Chairman of Pfizer, Inc.:

Mr. Kindler serves as Chairman of Pfizer Inc. since December 19, 2006. He is Chief Executive Officer since July 31, 2006; Vice Chairman and General Counsel from March 2005 to July 30, 2006; Executive Vice President and General Counsel from April 2004 to March 2005; and Senior Vice President and General Counsel from January 2002 to April 2004.

Prior to joining Pfizer, Mr. Kindler served as Chairman of Boston Market Corporation from 2000 to 2001, and President of Partner Brands during 2001, both companies owned by McDonald's Corporation. He was Executive Vice President, Corporate Relations and General Counsel of McDonald's Corporation from 1997 to 2001, and from 1996 to 1997 served as that company's Senior Vice President and General Counsel. Member of the U.S.-Japan Business Council and the Boards of Trustees of Ronald McDonald House Charities and Tufts University.

He serves as Director of Pfizer Inc. since July 2006. Mr. Kindler is Chairman of the Board's Executive Committee and a member of the Pfizer Executive Leadership Team.

Assignment: Once you have viewed the videos, answer the following questions:

Video 1 is related to social responsibility in establishing pricing policies in the developing world.

Video 2 is related to social responsibility in balancing the challenges inherent in marketing a business while keeping prices reasonable.(Transcript)

Explanation / Answer

Ques- What are some of the challenges marketers must consider when designing their pricing strategies?

Ans- The biggest challenge marketers are facing now when considering how to design their pricing stratagy is the economics of the area in which they will be proceeding.

Ques- Should different pricing approaches be utilized in different countries?

Ans- Yes,different pricing approaches be utilized in different countries.

Pricing is one of the four elements of the marketing mix, along with product, place and promotion. Pricing strategy is important for companies who wish to achieve success by finding the price point where they can maximize sales and profits. Companies may use a variety of pricing strategies, depending on their own unique marketing goals and objectives.

Premium Pricing-

Premium pricing strategy establishes a price higher than the competitors. It's a strategy that can be effectively used when there is something unique about the product or when the product is first to market and the business has a distinct competitive advantage. Premium pricing can be a good strategy for companies entering the market with a new market and hoping to maximize revenue during the early stages of the product life cycle.

Penetration Pricing-

A penetration pricing strategy is designed to capture market share by entering the market with a low price relative to the competition to attract buyers. The idea is that the business will be able to raise awareness and get people to try the product. Even though penetration pricing may initially create a loss for the company, the hope is that it will help to generate word-of-mouth and create awareness amid a crowded market category.

Economy Pricing-

Economy pricing is a familiar pricing strategy for organizations that include Wal-Mart, whose brand is based on this strategy. Aldi, a food store, is another example of economy pricing strategy. Companies take a very basic, low-cost approach to marketing--nothing fancy, just the bare minimum to keep prices low and attract a specific segment of the market that is very price sensitive.

Price Skimming-

Businesses that have a significant competitive advantage can enter the market with a price skimming strategy designed to gain maximum revenue advantage before other competitors begin offering similar products or product alternatives.

Psychological Pricing-

Psychological pricing strategy is commonly used by marketers in the prices they establish for their products. For instance, $99 is psychologically "less" in the minds of consumers than $100. It's a minor distinction that can make a big difference.

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