DEVELOPMENT OF PRICE STRATEGIES TO SUPPORT BRAND POSITIONING: STRATEGIC ISSUES FOR MARKETING POLICIES


Keywords: positioning, pricing, brand, pricing strategy, marketing strategy.

Abstract

Topicality. Marketing policies become more sophisticated and more focused nowadays. On many consumer markets there is a trend for differentiating and branding products as a response to defragmentation of the market. Brand is no more just a promotion tool; it shapes the company-customer relations for a long period. Brand is a concept completely based on understanding customer needs and evaluating related values. Meanwhile pricing policy remains a conservative part of marketing, which relies mostly on internal factors. Brand requires a careful positioning and price has to follow. Transforming the pricing into a powerful strategic instrument for gaining a desired marketing segment implies price positioning. The problem of it relates to the dilemma of meeting customer expectations concerning their willingness to pay and financial objectives based on profitability.
Aim and tasks. The purpose of the article is to identify the conceptual framework for development a pricing strategy, which follows brand positioning and ensure targeted profit requirements. To develop an appropriate pricing policy a comprehensive process of positioning shall be structured a step-by-step process. Positioning may relay on different factors ranging from quality and consumer value to competitors’ prices and benefits. A coordinated policy decisions shall follow. The next task is to ensure financial effectiveness of price policy. That requires a profound analysis of both external and internal factors. Strategic vision will reflect the positioning target. The several options of pricing strategies appear and the task of the company to choose the most appropriate one.
Research results. Pricing itself shall not be rigid, but its main goal - to support the brand development strategy. There are three general options for such strategies. The first one focuses on increasing sales profits among loyal customers. Therefore, the brand is becoming more focused, its promotion is more aggressive, and the positioning is more consolidated. Usually, the price increases gradually, first on new product modifications, special series, in conjunction with additional services, and so on. But the price increases as long as consumer loyalty is not compromised. The second strategy is aimed at increasing the segment of loyal consumers by "catching" consumers, loyal to other brands or disloyal to any brand in general. One of the options for such a delusion involves aggressive pricing. In most cases, a product with extremely competitive "price-quality" and powerful marketing support is being created, aimed at forming a new group of loyal consumers. As a result, the price will not change in the long run while sales are increasing. The key to succeeding in this policy is to prevent loyal customers from being "lured" to new consumers. The third version of the strategy of brand development implies its expansion into new segments of the market. The focus of the brand becomes more vague, it is more focused on the properties of the product, but not on consumer preferences. Price becomes less emotional, but more rational factor of consumer choice. Pricing becomes similar to that of the non-branded market.
Conclusions. Thus, to achieve sustainable financial objectives shall consider mostly irrational pricing factors, among which the willingness or desire of consumers to pay a price for the product is the most prominent. Branded markets are determined by the predominance of irrational aspects of pricing. Therefore, the pricing strategy is aimed at the intensive use of communication tools. However, rational factors such as the volume of the target market segment, consumer value and competitive price also play an important role in shaping the financial success of pricing on markets of branded products.

Author Biographies

Y.L. HRINCHENKO

PhD. Econ. Sciences, associate professor
Chair of marketing and business administration
Odesa National Mechnikov University,
Frantsuzkyi boulevard, 24/26, Odesa, Ukraine, 65044

I.V. ROBUL

PhD. Phys. Sciences, associate professor
Chair of marketing and business administration
Odesa National Mechnikov University,
Frantsuzkyi boulevard, 24/26, Odesa, Ukraine, 65044

L.M. ZALUBINSKA

PhD. Phys. Sciences, associate professor
Chair of marketing and business administration
Odesa National Mechnikov University,
Frantsuzkyi boulevard, 24/26, Odesa, Ukraine, 65044

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Published
2018-12-20