Question 3a

Setting a distinct market strategy is an essential market intelligence strategy for any organization trying to introduce a new product in the market. There are different pricing strategies that an organization may adapt to ensure that it competes effectively with other producers on the current market. In our scenario, we will delve into different pricing strategies that will ensure that Spotify meets consumers’ needs and preferences in Singapore considering that it is a new market.

First and foremost, Spotify can adapt price skimming in Singapore as a price strategy. Price skimming has been designed toaid businesses to maximize their sales on new products and service in the market. This particular set of pricing is perfect for setting high rates for the introductory phase (Nagle and Müller, 2017). Spotify Singapore can use this as a market spike during the introduction of its services and product. This causes a rise of new competitors, and therefore Spotify Singapore can use its skimming position of dropping prices and set a market price pace for both the dominating company and the competitors in the market. In this manner, it allows the company to gain its profits early enough before dropping the prices to get more price-sensitive customers. This mode of market pricing will assist Spotify to command the price of its products and services on its current market. Additionally, price skimming creates an impression of the increased quality of products and uniqueness of services offered, when a product is first introduced in the market.

Secondly, Spotify Singapore can adopt economic pricing as a market price strategy as it enters the new market. Economic pricing strategy involves the reduction of costs in marketing and production(Nagle and Müller, 2017). Therefore, Spotify can attract the most price-conscious customers since they can purchase Spotify products and services without a single strain on their finances. Spotify can consider discounts for their most frequent and loyal consumers, which is a good way of assuring consistency in the purchase of Spotify services and products.

Thirdly Spotify Singapore can adoptbundle pricing as a marketing strategy. Bundle pricing is a good marketing strategy which involves the purchase of multiple products instead of individual products to reduce costs. Bundle pricing ensures that there is a reduced rate of moving products and services being purchased, where creating a cluster of products for sale at a lower price allows the least sold products and services on regular sale(Nagle and Müller, 2017). It is a good way of increasing consumer value since you are giving them some extra commodity at discounted prices, having that in mind there should be a consideration that the profit you make during the high-value items must make up for the low-value items.

Question 3b

Vinyl records can use a pricing premium, which involves setting the cost of products higher than that of the existing competitors in the market. This will ensure that Vinyl consumers have a perception that the products and services produced by the company are higher than its competitors’ products and services. Customers tend to have the notion that a high price is directly proportional to the qualityof a product (Nagle and Müller, 2017). For instance, Vinyl Company can ensure products of the same quality and quantity. For example; When you purchase in a supermarket a DVD drive that has a tag for around 5.22$ and one that has a price on the streets for 4.00$ would tend to have low sales though it’s the same product from the same company. Doubts and fear of having a counterfeit could lead to low sales than the ones at a high cost.Therefore the business must work hard towards giving a product efficient to create a value of perception for the consumers. As well as creating a high-end quality product and ensure there is a proper marketing strategy, proper product packaging will ensure that premium pricing will be carried out in full.

Having that physical sales had tumbled down pricing for market penetration is a proper way of getting all the commodities in question to a good start, attracting buyers with low prices on services and products. It’s an excellent technique to draw attention away from the already existing market dominants, keeping in mind that market penetration pricing does not result in loss of primary income for the business.Consequently, there will be an increase in profits due to the consumer awareness of the vinyl product and services. Market stability would be in recognition after penetration in the market, and companies will consider raising the prices to a better counter and reflect the businesses position in the market.

References

Nagle, T. T., & Müller, G. (2017). The strategy and tactics of pricing: A guide to growing more profitably. Routledge.

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