Internal and External Factors Affecting Pricing Strategy
Answer 1
Assessment 1 focused on the introduction of a new matt lipstick range by MAC Cosmetics that will bring a changing factor in the cosmetic industry. This is because professionals design the lipstick manufactured by MAC. These professionals test the color and content of the lipstick that can suit every skin and is different from other lipstick range in the market. The new lipstick range will be offered in variety of colors and each color will be different from one another. The product will be packed in a cylindrical case and will also be available in a pallet format along with a brush to use make it easily applicable by the customers.
Answer 2
External and internal factor of n organization plays a crucial role in defining the price of the product. Internal factors are the mission of the organization, structure of the business, value system, corporate culture and others. Whereas the external factors are the political, environmental, economy and legal factors of the country in which the business is operating. MAC will also develop a pricing strategy depending on the internal and external factors affecting their business.
External factor that will affect the pricing strategy of MAC for its new lipstick range is the economic condition of the society. While planning for its pricing strategy MAC should consider the economic condition of the country it is launching its lipstick such the per capital income, living standard and the literacy rate.
The internal factor that will influence the pricing strategy of the company is the mission and vision of the organization. This is because the vision and goal of the organization to stand as a premium brand will influence MAC to set high range of pricing for its new lipstick range. Whereas, if the brand aims at targeting the niche market the it will allow the charge high price for its product. Thus, the vision of the organization influences its pricing strategy.
Answer 3
Various types of techniques a company uses to set its price depending on the aim and requirement of its business. There are various types of pricing techniques such as contrast principle, decoy pricing, package pricing, combination of decoy and package pricing and the magic number nine. Among these types of pricing techniques, MAC can use two types of pricing techniques such as decoy pricing and package pricing. This is because package pricing will help the target the women customers such as setting the price by combining two or three things together and presenting as discounts. This will attract more customers as women have the psychology of buying more during discounts and offer. Another is decoy pricing can be used by MAC as it is already a well-known brand in the cosmetics market that women love to buy out of fame and status. It can set the pricing strategically on products that it wants to sell more such as putting only before a price and combination of two things in single price. For example printing “only for $30” will attract more customers than a normal price tag.
Answer 4
Different Pricing Techniques that the Company Can Use
Short-term pricing strategy that the company can use for its new range of lipsticks is the psychology pricing. This is because for introducing the new product and to make the customers aware of it the company can target the psychology of the customers. While using psychology pricing, it can give discounts and offer on the product so that women customers are attracted by it. Such kind of initial strategy will help the company to attract new customers and to inform the existing customers about its new range of products that it is launching in the market. Charging a high price initially will not benefit the company as very few customers get attracted to high price as a symbol of status. Thus, targeting the psychology of the women, as they love discounts and offers will be the best way the company can introduce its new product range initially in the market.
Answer 5
Another important factor that the company needs to decide in order to be successful in its new product launch is by offering wide range of payment methods to the consumers. This is because customers vary in their choice of paying the price of the product. The company will allow the customers to pay through online mode of payment and through cash. The online payment mode will help the customers to buy the lipstick even if they do not have much cash with them. On the other hand, the customers buying lipstick from online website can pay through cash on delivery after checking that they have received the correct order. Both the type of payments gives the chance to the customers a wide range of options and chance to buy the lipstick.
Answer 6
The next important thing that the company should ensure after deciding the payment method and pricing strategy is the method by which it will track the delivery report of each item to the customers. For proper brand value and attracting customer loyalty it is important that the company keep a record about the delivery time of their product to the customers. For the purpose the company should install a tracking software in which it ensure that the delivery man takes the signature of the customer receiving their products. Further, as soon as the customer receives the product the company ensures to send a delivery report to the customer’s account for their approval. In this way the customer gets their products safely and the company can also maintain the records easily.
Answer 7
Short-Term Pricing Strategy to Introduce the New Product
To ensure that the customers are getting best of service it is necessary that the company enables a good customer service for clearing all the doubts and queries of the customer. First method is that the company should implement a customer response system in the order page. In the page customers can rate the product and give a reason for the any poor rating. Another way is the customer help portal in which they can call and solve their queries or track their products 24/7. These two processes will ensure that the customers are getting satisfied responses and solution to all their queries.
Answer 8
Two most important service that the customer requires for a successful and good experience from an online shopping website is their delivery status and information about their account. For getting information about their delivery status MAC should implement a tracking software in their online website in which the customer can get automatic notification about their order as soon it is shipped or dispatched or ready for delivery. It is the easiest and a hassle free method of tracking order.
On the other hand the customers can get their account information in my account section in the online portal of the company. My account section of the website consists all the required information of the customer’s accounts such as number of orders, account balance, offers and other details. These are the two ways by which maximum customer satisfaction can be offered.
Answer 1
Three ways MAC should ensure that their staffs follow in order to build a healthy relationship with their customers. First the staffs should be live actively for any customer’s complaints. For the purpose the staffs should respond immediately to complains, either by call or chat facility. Secondly, the staffs should maintain effective and good quality communication with the customers. They should call the customers frequently to know their queries and suggestion for better service. This will make the customers feel safe and close to the company. Third is by building trust with the customers. This is because customer loyalty is the best way to retain customers. The first two activities will automatically increase the trust of the customers towards the company.
Answer 2
MAC should also follow up the customers frequently to get feedback about their staffs and workers. Moreover, they can also get the feedback about their staffs by messaging a feedback rating form to the customers just after a service in which the customers are asked to rate the service they got from the staff from one to ten. This allows the company to track the quality of customer service delivery of each staffs.
Answer 3
Direct response offer are offered by the company to attract increased customer traffic and ensure better customer satisfaction. However, the company needs to design their direct response offer they can provide to the customers depending on the issue put forward by the customers in the feedback form. In case many customers are facing issues with the appropriate color and texture of the lipstick then the staffs should ensure that they allow free trial to the customers as their direct response service. Further if the staffs are reluctant in buying the product because of its high price then the staffs can set money-back guarantee offer as their direct response offer. These are the steps MAC can set as direct response offer if customers are facing any doubt about the quality and excessively high price of the lipstick.
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