Advantages Of Colgate Pricing

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Pricing In a society that cares about appearances, consumers continually look for a new innovative oral care product to provide an extra sparkle to their smiles. Oral care companies are marketing their products to different consumer segments in order to capture their share in the growing segment market. Today’s consumers demand numerous benefits from their toothpastes and manufactures are responding accordingly. Similarly, Colgate is committed to act with compassion, integrity and honesty in all situations, to listen with respect to others and to value differences. Pricing is the process of determining what a company will receive in exchange for its product or service. Pricing factors are manufacturing cost, market place, competition, market…show more content…
Competitor Oriented Pricing is setting a price for toothpaste using the prevailing market price as a basis. It is also known as going rate pricing and is a common practice with homogeneous products with little variation from one producer to another. Close Up and Medicame are the real competitors of Colgate toothpaste. They have reduced the market share of Colgate. Therefore, Colgate continues to improve its products through innovation and customer satisfaction by setting prices by taking into consideration the price set by its competitors. In the same wavelength, there are certain existing Pricing Strategies that Colgate- Palmolive Company uses. Penetration pricing is a pricing strategy where the price of a product is initially set low to rapidly reach a wide fraction of the market and initiate word of mouth. The strategy works on the expectation that customers will switch to the new brand because of the lower price. Penetration pricing is most commonly associated with marketing objectives of enlarging market share and exploiting economies of scale or experience. The Colgate-Palmolive Company has noticed certain advantages of using this strategy: • It can result in fast diffusion and adoption. This can achieve high market penetration rates quickly. This can take the competitors by surprise, not giving them time to…show more content…
This can create critically important enthusiasm and support in the channel. • It can be based on marginal cost pricing, which is economically efficient. When Colgate Fresh Confidence was lauched in 2000 and Colgate Herbal and Colgate Total Plus Whitening arrive in 2001, Colgate Palmolive had to apply this Strategy for the fast adoption of the new toothpaste by its customers. Differential Pricing, this strategy normally comprises of selling the same product at different market sectors so as to increase the profitability of the company and to make the product available for all consumers in all geographical part of the world. Colagate toothpastes are sold in medical stores as well as super stores. However comparing the prices in these two different market sectors, it can be noticed that Colgate toothpaste that those purchased at Medical Stores are more expensive that those at Market stores. Psychological Pricing Strategy: This approach is used when the marketer wants the consumer to respond on an emotional, rather than rational basis. For example Price Point Perspective (PPP) , that is for example, instead of setting the price for Colgate Total Advance Toothpaste Tube of 75ml at $2.00, it is sold at $1.90. Likewise, many products of Colgate- Palmolive are being set at a PPP by cutting off few cents. This has proven to increase the sale of Colgate Toothpaste and other products on the
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