80%(5)4 out of 5 people found this document helpful
This preview shows page 8 - 10 out of 38 pages.
remain similar. It is also generally used once a price of a product has reached a level of equilibrium,which often occurs when a product has been on the market for a long time and there are many substitutesfor the product. It is completely suitable for Baskin Robbins to use this strategy because Baskin Robbinshas a history of 71 years old in the market and there are a lot of substitute products of Baskin Robbinswhich are Haagen Dazs, New Zealand Natural Ice cream, and London Dairy Ice cream. Baskin Robbins also has conducted market research to know more clearly about which market it shouldbe targeted on to provide better needs to the customers. Baskin Robbins also able to know it shouldnarrow or broaden its focus. By conducting the market research, Baskin Robbins able to know which agegroup will more prefer which flavor of ice cream, what income level of people will more willing to buyits product, or what flavor of the ice cream is more favor by the customers. Once Baskin Robbins hastargeted on the correct market, it can create more loyal customers to purchase and consume its product.After having loyal customers, it helps inspiring people to spread the word about Baskin Robbins and whatbusiness is it doing. It can also help Baskin Robbins to generate more sales because there are loyalcustomers and also new customers keep on increasing. In addition, Baskin Robbins also uses segmenting by volume or purchase quantity. Baskin Robbinsencourage customers to place larger orders, which almost always result in cost savings for the seller. Thecustomers who purchase half gallon of ice cream is cheaper than the customer who purchase one pint. Theoriginal price of the half gallon is RM88 with 1385gm, so it is RM0.06 per gram of ice cream. However,the original price of one pint is RM25.50 with 350gm, so it is RM0.07 per gram of ice cream. From this,we can see that the customer who has purchased half gallon can save more because he has save aroundRM0.06 per gram. 7
BBDT3193 Pricing StrategyThe third level of the strategic pricing pyramid is the price and value communication. A successfulpricing strategy must justify the prices charged in terms of the value of the benefits provided. Developingprice and value communications is one of the most challenging tasks for Baskin Robbins marketersbecause of the wide variety of product types and communication vehicles. The first value communicationof Baskin Robbins is by adapting the message for product characteristics. There are two types of productcharacteristics which are relative cost of search for information and the type of benefits sought. Therelative search cost if Baskin Robbins is high because Baskin Robbins have differentiation attributes thatare more difficult to evaluate across the other brands and also requiring the customer to invest substantialtime and effort to evaluate the products before purchasing. So, Baskin Robbins is considered as anexperience good. For examples, a typical buyer would like to have to try different brands other thanBaskin Robbins to make the inferences. After that, they only able to know that which type of ice cream is