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What different types of pricing techniques are available to Cadbury?

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Introduction

Mix strategies What different types of pricing techniques are available to Cadbury? There are 7 different pricing techniques that are available to Cadbury. 1. First pricing technique is skimming pricing. With skimming pricing, these prices are set very high to take advantage of some peoples desire for a new product or design at any price. Skimming is most effective if demand is inelastic. For e.g. Cadbury put their prices at the same as most of their competitors and at the price their customers are able to pay. 2. Cost plus pricing Pricing methods which are based on the cost structure of Cadbury that are favoured by accountants because they are supposedly more accurate and reliable. Cadbury is trying to maximise it profits. This method works successfully because all costs need to be accurately accounted. In many firms this is a very difficult process which is why the simpler mark-up procedure is used. Cost plus pricing tends to ignore the demand for the product and the competition. 3. Positioning pricing Cadbury uses this method to position prices that are set which reflect the consumers view of the chocolate bean. 4. Demand based pricing Cadbury set their prices based on what they think the consumer is prepared to pay. If they don't then they wont sell as good as they thought. If they do sell at the customer's price they will have a good reputation and an output of more customers. 5. ...read more.

Middle

Cadbury also advertises by billboards and Internet. Television advertising is expensive but Cadbury can afford it because it has a high market position. It uses T.V advertising to advertise many of their products. The company also advertises on buses because a whole range of people get to see what it offers and it keeps them in suspense. This make the people want to buy the product. Public Relations is another method of communicating. It is a process of a specific message to it's stakeholders so as to achieve favourable publicity. For Cadbury, Public Relation involves: * Keeping the media informed of new products or changes to existing products * Organising a product launch For Public Relations to be effective they have to: * Be planned and controlled so that the right message gets across to the right people * To be ready if any problem accurse. Sales Promotion refers to the techniques and the methods used by Cadbury to sell their products to customers. A primary purpose is to get the customers to take action and purchase a product. Discounts such as 'buy one get one free' is a good way of selling and is popular with supermarkets. Cadbury use different techniques if they are not selling something as good as usual. They reduce the price and put offers on such as increasing the weight, the size or even the quantity of the chocolate. The overall objectives of sale promotions are; * To encourage potential customers to buy Cadburys products. ...read more.

Conclusion

Disadvantages of short channels is * Retailers can become very powerful and are able to negotiate on very low prices. This has happened with many suppliers to UK retail chains. Low prices, however, have not been passed on to consumers. * The cost of distributing the product may rise. Cadburys are a good company with a high market share so it may be slightly difficult but they have managed due to good marketing strategies. It has distributed its products in many ways even if they have failed in some but they always try to find the right way to distribute their product so their customers stay satisfied. The long channel of distribution could be as follows PRODUCER WHOLESALER RETAILER COMSUMER When there are a large number of retailers, Cadbury (the manufactures) will usually deal with a wholesaler who buys in bulk, stores the products and sells them on to the retailer in smaller quantities. A small grocer will usually go to the wholesaler. This is mainly done regularly to avoid the small space. Advantages of long channels * Retailer gains convenience and minimises storage costs * Consumers are able to buy in small quantities from retailers * Goods are available close to where they are needed * Wholesalers provide valuable retailer support services * Transport costs are lower because the producer does not have to make as many deliveries. Disadvantages of long channels * Prices tend to be higher when goods change hands many times; compare prices in the corner shop with those in supermarkets * Producers have less control over the way in which goods are stored and sold ?? ?? ?? ?? ...read more.

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