In every business organization, pricing is the central idea for the most significant factor, making profits. Therefore, several considerations and strategies have to be implemented in the determination of prices in a specific or a diverse product. The intent of this thesis is to determine the pricing strategy for a mobile travelling application.
The travel app branded Aura of beliefs & expectations makes it unique in the market. Its primary target is any mobile users ranging from teenagers to grownups who value the essence of travelling, which can be, either on vacation or business trips. The app is designed to save crucial information and photos of the trade shows or other business place. Also, the product is designed to find specific locations such as hotels or conference rooms, show common and educative phrases, and display important contacts.
The distribution channel should be well placed and effectively to achieve maximum sales volume and reach the potential customer. The intensive distribution strategy will be the most effective distribution strategy since the app targets a large number of people and also it will enhance the creation of a market position among other apps serving the same purpose. Moreover, use of intensive will cover a large market possibly globally due to the use of a wide range of wholesalers and retailers. This will also reduce the expenditure or otherwise spread expenditure of distribution hence the cost of serving customers can not be felt. I discredit exclusive distribution because it only focuses on a particular region using a single outlet hence increases the expenditure of serving the customers. On the other hand, selective distribution only applies in the case where demand is high.
Among the most effective retailers in marketing of the app, is the full service retailer and specialty stores since they offer specialized services where demonstration and advice can be used to convince the purchaser to buy the mobile app. Using merchandise depth it will be possible to put a range of apps serving the same purpose, however, the Aura of beliefs & expectations is distinctive and provides a range of purposes enough to outsmart other apps. Specialty stores are a perfect example of such retailers who provide a specified product line but with a variety of brands serving the same purpose.
Price objectives ranges serves different options including increasing the market volume and share, and increasing investors value. However, the pricing of this app mostly concentrates on creating increased customer satisfaction as a means to increase the profit margin. Integrating customer satisfaction in the process of pricing ensures long term consumer loyalty hence ensures long term profitability. Moreover, this objective makes it easy for consumers to access the prices via the company website.
The best pricing strategy will be the one based on the customer’s needs and preferences. The mobile app pricing should be developed using the responses and demands made by the customers. This is also referred to as value pricing since the cost of the mobile app is centered on the specified value outlined by the customer. Therefore, the pricing is the reflection of the value of the app. Tailoring prices to the value of the app ensures that the company gains competitive advantage and obtainment of the large volume of sales.
The retail price of the can vary among various retailers, but there is a common price regulating the sale of the app. The app will be sold at by $ 6.99 since the product has a mark-up of 30%.
The price paid by retailers = selling price x (100% - 30%)
= 6.99 × 0.7
= $ 4.89
The company requires a profit of 20%. Therefore, the target cost will be
= price to retailers × (100% - 20%)
= 4.89 × 0.8
=$ 3.91
As seen in the above context, pricing the mobile app is a complex and an extremely necessarily process. This also applies to every product that is still in or is being introduced to the market.
References
Luther, W. M. (2011). The Marketing Plan. New York: AMACOM Div American Mgmt Assn.
Solomon, M. R., Marshall, G. W., & Stuart, E. W. (2011). Marketing: Real People, Real Choices. Auckland: Prentice Hall.
