Page 388 - Foundations of Marketing

Pricing Concepts and Management | Chapter 12 355

Internet Exercise

T-Mobile

T-Mobile has attempted to position itself as a low-cost 1. How many different calling plans are available in
cellular phone service provider. A person can purchase your area?
a calling plan, a cellular phone, and phone acces- 2. What type of pricing strategy is T-Mobile using on its
sories at its website. Visit the T-Mobile website at rate plans in your area?
www.t-mobile.com.

Setting the right price for a product is a crucial part of competition, and product positioning for your target
a marketing strategy. Price helps to establish a product’s market during your discussion.
position in the mind of the consumer and can differenti- 2. Review the various types of pricing strategies. Which of
ate a product from its competition. Several decisions in these is the most appropriate for your product?
the marketing plan will be affected by the pricing strat- 3. Select a basis for pricing your product (cost, demand,
egy that is selected. To assist you in relating the informa- and/or competition). How will you know when it is time
tion in this chapter to the development of your marketing to revise your pricing strategy?
plan, focus on the following:
The information obtained from these questions should
1. Using Table 12.1 as a guide, discuss each of the seven assist you in developing various aspects of your market-
pricing objectives. Which pricing objectives will you ing plan. Develop your marketing plan online using the
use for your product? Consider the product life cycle, Interactive Marketing Plan at www.cengagebrain.com .

Pricing at the Farmers’ Market

Whether they’re outside the barn or inside the city limits, they didn’t used to be, and that bodes well for their continued
farmers’ markets are becoming more popular as consumers growth,” says the director of LocalHarvest.org, which pro-
increasingly seek out fresh and local foods. Today, more than duces a national directory of farmers’ markets.
7,000 farmers’ markets are open in the United States, selling Selling directly to the public enables farmers to build rela-
farm products year-round or only in season. Although some tionships with local shoppers and encourage repeat buying
are located within a short drive of the farms where the fruits week after week as different items are harvested. It also allows
and vegetables are grown, many operate only on weekends, farmers to realize a larger profit margin than if they sold to
setting up stands in town squares and city parks to offer a wholesalers and retailers. This is because the price at which
combination of shopping and entertainment. “These markets intermediaries buy must have enough room for them to earn
are establishing themselves as part of our culture in ways that a profit when they resell to a store or to consumers. Farmers

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