Part 1. Pricing Strategy: Module 1 Introduction: Pricing as an Element of the Marketing Mix

Michael Victor Gonzales REB, CSP, MBA

8 Sept 202013:23

Summary

TLDRIn this educational video, Michael Victor A. Gonzalez introduces students to the strategic pricing module at Gimera State College's College of Business and Management. Gonzalez, a licensed real estate broker and agriculturist, emphasizes the importance of pricing as a key element in marketing for business profitability and sustainability. The module aims to enhance students' understanding of value propositions, flawed pricing paradigms, and the principles of strategic pricing. It also explores the role of marketing in price setting, the nature of commercial exchange, and the impact of entrepreneurship and regulation in a free market economy.

Takeaways

📚 The course is about 'Pricing Strategy', aimed to help students understand the complex tasks involved in strategic pricing.
🏢 Instructor Michael Victor A. Gonzalez is a licensed real estate broker and an agriculturist, bringing a unique perspective to the subject.
💰 The module emphasizes the importance of strategic pricing for business profitability and sustainability.
📈 It guides students to understand the value proposition and how to create and communicate it effectively for sustainable growth.
🔍 The course will educate on flawed pricing paradigms and provide better strategies to avoid unprofitable decisions.
📊 Making sales more profitably is highlighted as a key to achieving sustainable growth in revenue.
🛍️ The principles of strategic pricing and objectives for sustainable profitability are discussed.
🤝 The role of creating and communicating value to customers in the marketplace is explored, with a focus on real-world applications.
📈 A case study will be discussed to illustrate how good value can lead to extraordinary success.
🗣️ The importance of effective price and value communication at the right point in the buying process is underscored.
🤝 The potential conflicts between stakeholders and managers, and techniques to mitigate these conflicts, will be covered in the module.

Q & A

Who is the instructor for the 'Pricing Strategy' module?
-The instructor for the 'Pricing Strategy' module is Michael Victor A. Gonzalez.
What are the dual professional qualifications of Michael Victor A. Gonzalez?
-Michael Victor A. Gonzalez is a licensed real estate broker and a licensed agriculturist with a major in agribusiness.
What is the primary objective of the 'Pricing Strategy' module?
-The primary objective of the 'Pricing Strategy' module is to help students understand and conceptualize the range of interrelated tasks involved in strategic pricing.
How does the module aim to guide students in achieving profitability and sustainability in business?
-The module aims to guide students by teaching them how a superior value proposition, when properly created and communicated, can lead to delivering superior value at a lower cost, thus contributing to sustainable growth.
What are the flawed paradigms pricing methods that the module will educate students about?
-The module will provide examples of flawed paradigms pricing methods so that students can recognize and understand why they should not follow them and instead identify better strategies.
What is the significance of making sales more profitably in achieving sustainable growth in revenue?
-Making sales more profitably is key to achieving sustainable growth in revenue over a long period, as it ensures the business remains profitable and can continue to operate effectively.
What are the four categories of marketing activities usually referred to as the marketing mix?
-The four categories of marketing activities usually referred to as the marketing mix are product, price, promotion, and place.
What is the marketing concept and how does it guide pricing activities?
-The marketing concept is a business philosophy that focuses on customer needs and wants. It guides pricing activities by ensuring that prices are set in a way that meets customer expectations and creates value for them.
What is the importance of understanding customers and identifying potential customers in the context of pricing?
-Understanding customers and identifying potential customers is crucial for effective price setting because it allows businesses to tailor their pricing strategies to meet the needs and expectations of their target market.
How does the script define the term 'commercial exchange'?
-The script defines 'commercial exchange' as an interaction where a seller provides a product to a buyer in return for something, usually an amount of money, and both parties participate voluntarily because the exchange is expected to benefit them.
What role does the Department of Trade and Industry play in commercial exchanges?
-The Department of Trade and Industry governs regulations that protect customers and ensure fair practices in commercial exchanges, helping to maintain trust and order in the marketplace.
What is the role of entrepreneurs in a free market economic system as described in the script?
-Entrepreneurs in a free market economic system are individuals with dreams and ambitions who are willing to work with ideas, explore possibilities, and find opportunities, even in seemingly impossible situations.

Outlines

00:00

📚 Introduction to Strategic Pricing

In the first paragraph, Michael Victor A. Gonzalez introduces himself as the instructor for the 'Pricing Strategy' module at Gimera State College's College of Business and Management. He outlines the importance of strategic pricing in achieving profitability and sustainability in business. The module aims to help students understand the value proposition and how to communicate it effectively to deliver superior value at a lower cost for sustainable growth. It also includes recognizing flawed pricing paradigms, understanding the principles of strategic pricing, and the objectives needed for sustainable profitability. A case study on value creation leading to success is mentioned, emphasizing the importance of price and value communication in the marketing process. The paragraph concludes with the anticipation of identifying potential conflicts in business and discussing mitigation techniques.

05:02

🔍 Analyzing the Market and Pricing Strategy

The second paragraph delves into the marketing approach to pricing, emphasizing the analysis of the market and competition. It discusses the importance of understanding how competitors price their items and defining the marketing mix. The paragraph also covers determining market position, budgeting, and execution planning. The focus is on understanding customers and identifying potential ones, with an overview of how marketing principles guide effective price setting. The concept of commercial exchange is explored, highlighting its voluntary nature and the benefits it brings to society. The paragraph also touches on the broader aspects of marketing beyond advertising and salesmanship, and the need for governmental regulation to protect customers and ensure fair business practices, especially in the context of online transactions during the pandemic.

10:03

🌐 The Dynamics of Commercial Exchange in a Free Market Economy

The third paragraph discusses the dynamics of commercial exchange in a free market economy. It describes the voluntary nature of exchanges and how they can lead to mutual benefits for both buyers and sellers. The paragraph also addresses the limitations of choice and the potential dissatisfaction that can arise from limited options or product failures. The role of governmental regulation, such as the Department of Trade and Industry, is highlighted to protect consumers and ensure fair practices. The paragraph concludes by recognizing the entrepreneurial spirit and the pressures of choice in modern free market societies, emphasizing the importance of the commercial exchange at the heart of the economic system and its global adoption.

Mindmap

Keywords

💡Pricing Strategy

Pricing Strategy refers to the method or approach a business uses to set the price of its products or services. In the video, it is the central theme, with the instructor emphasizing its importance in achieving profitability and sustainability in business. The script discusses how strategic pricing is vital for creating a superior value proposition, which is key to sustainable growth.

💡Value Proposition

A value proposition is a promise of value to be delivered to customers and should explain the benefits a customer will receive. In the context of the video, a superior value proposition is mentioned as a way to deliver superior value at a lower cost, which is essential for sustainable growth. The script illustrates this by educating students on how to create and communicate this value effectively.

💡Sustainability

Sustainability in business refers to the ability of a business to maintain its operations over the long term without depleting resources or causing harm to the environment. The script discusses how strategic pricing plays a role in achieving this by guiding students to understand the importance of making sales more profitably to ensure long-term growth in revenue.

💡Marketing Mix

The marketing mix is a set of tactics that businesses use to promote their products or services. It traditionally includes the four Ps: Product, Price, Place, and Promotion. In the video, the instructor explains that pricing is an element of the marketing mix and is crucial for guiding effective price setting and market positioning.

💡Commercial Exchange

Commercial exchange is the process of buying and selling goods or services between two parties. The script describes it as a voluntary interaction where both parties are better off after the exchange than before, highlighting the importance of this concept in the free market economy and its role in creating benefits for society.

💡Profitability

Profitability is the ability to generate profit from business activities. The video script emphasizes the importance of strategic pricing in achieving profitability, as it guides students to understand how setting the right price can lead to sustainable business growth and financial success.

💡Agriculturist

An agriculturist is a professional who specializes in agriculture, often with a focus on agribusiness. The instructor introduces himself as a licensed agriculturist, indicating his expertise in the field, which adds credibility to his teaching on pricing strategies, especially in the context of agribusiness.

💡Flawed Paradigms

Flawed paradigms refer to incorrect or outdated models or methods of thinking. In the script, the instructor educates students on recognizing and understanding why certain flawed pricing methods should not be followed, providing examples to illustrate the point and guiding them towards better strategies.

💡Customer Needs

Understanding customer needs is fundamental to marketing and is the basis for creating products or services that meet those needs. The script mentions that marketing consists of a full range of activities involved in facilitating commercial exchange, all guided by a concern for customers' needs, emphasizing the importance of this concept in effective pricing and marketing strategies.

💡Entrepreneurship

Entrepreneurship is the process of designing, launching, and running a new business, which is typically a response to a business opportunity. The script refers to entrepreneurs as individuals with dreams and ambitions who are willing to explore possibilities and find potential in the impossible, illustrating the role of entrepreneurship in driving innovation and growth in a free market economy.

💡Governmental Regulation

Governmental regulation refers to the rules and policies set by the government to control certain aspects of business operations to protect consumers and ensure fair competition. The script mentions the need for such regulation in a free market economy, citing the example of the Department of Trade and Industry, which helps protect customers and support industry.

Highlights

Introduction to the instructor, Michael Victor A. Gonzalez, a licensed real estate broker and licensed agriculturist.

Course subject is Pricing Strategy, aimed at understanding strategic pricing in business.

Pricing is one of the four key elements in marketing, crucial for business profitability and sustainability.

Students will learn to create and communicate a superior value proposition for sustainable growth.

Education on recognizing flawed paradigms in pricing methods to avoid unprofitable decisions.

Importance of making sales more profitably for sustainable revenue growth discussed.

Explanation of the principles of strategic pricing and objectives for sustainable profitability.

Discussion on creating value in the marketplace and its impact on customer satisfaction.

Case study on the application of pricing strategies leading to extraordinary success.

The significance of effective price and value communication in the marketing process.

Identification of potential conflicts between stakeholders and techniques to mitigate them.

Lesson one focuses on pricing as an element of the marketing mix.

Understanding the voluntary nature of commercial exchange and its benefits for society.

Different terms used to refer to prices and what managers mean when discussing pricing.

The four categories of marketing activities known as the marketing mix.

The marketing concept and how it guides pricing activities.

The broader perspective of marketing beyond advertising and salesmanship.

The role of commercial exchange in facilitating transactions and its voluntary nature.

The importance of entrepreneurial spirit in the free market economic system.

The necessity of governmental regulation in a free market economy to protect consumers.

The impact of the pandemic on online marketing and customer satisfaction.

Conclusion and transition to the next topic: understanding what price is.