closely follow market conditions and demand, especially at a segment level. Once a pricing strategy dictates what a K & N’s wants to do, pricing tactics determine how a K & N’s actually
captures the value. Tactics involve creating pricing tools that change dynamically, in order to react to changes and continually capture value and gain revenue. Price Optimization, for example, involves constantly optimizing multiple variables such as price sensitivity, price ratios, and inventory to maximize revenues. K & N’s successful pricing strategy, supported by analytically-based pricing tactics, has drastically improved a firm’s profitability. InventoryK & N’s has focused on controlling inventory, Revenue Management of K & N’s is mainly concerned with how best to price or allocate capacity. First, company can discount products in order to increase volume. By lowering prices on products, K & N’s can overcome weak demand and gain market share, which ultimately increases revenue so long as each product sells for morethan its marginal cost. Overbooking’s focus is increasing the total volume of sales in the presenceof cancellations rather than optimizing customer mix.MarketingPrice promotion allows K & N’s to sell higher volumes by temporarily decreasing the price of their products. Revenue Management techniques measure customer responsiveness to promotions in order to strike a balance between volume growth and profitability. An effective promotion helps maximize revenue when there is uncertainty about the distribution of customer willingness to pay. When K & N’s products are sold in the form of long-term commitments, e, and promotions help attract customers who will then commit to contracts and produce revenue over a long time horizon. When this occurs, K & N’s also strategize their promotion roll-off policies; they begin decide when to begin increasing the contract fees and by what magnitude to raise the fees in order to avoid losing customers. Revenue Management optimization proves useful in balancing promotion roll-off variables in order to maximize revenue while minimizing churn.Distribution ChannelsRevenue Management through channels involves strategically driving revenue through different distribution channels. K & N’s different channels represent customers with different price sensitivities. Different channels often have different costs and margins associated with those channels. When faced with multiple channels to retailers and distributors, K & N’s Revenue Management techniques also help to calculate appropriate levels of discounts to offer distributorsthrough opaque channels to push more products without losing integrity with respect to public perception of quality.MARKET CAPITALIZATION:Marketing competence Market share of K&N’s is almost 70% (on average) in ready to cook foodcategory.
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