Nestle Pricing Strategy

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Nestle Pricing Strategy

By | August 2012
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NESTLE PRICING STRATEGY

Price

In Price strategy, Nestle has adopted the strategy of non-price competition. It is offering one price for NPL to all. It also keeps the check on distributors to maintain single price of NPL. It offers trade discounts to its distributors.

“Price is the amount of money and/or other items with utility needed to acquire a product and utility is an attribute with potential to satisfy the wants.”

A product price influences wages, rent, interests, and profits. Some prospective customers are interested in low prices, where as another segment is more concerned with other factors, such as service, quality, value, and brand image. Consumer’s perception of quality may be influenced not just by price but also by such factors as store reputation and advertising.

Nestlé estimated the cost by doing accumulated production because if they produced mass production so it reduced their labored cost and other cost for production process it’s a big advantages of the Nestlé company who produce large quantity of units. With the help accumulated production Nestlé Company has a low cost of production and high profit margin. Next, Nestlé company selecting a price method of going rate price because their pricing near the competitor pricing. As an example, Nestle juices have a market leader in beverage industry. Last, Nestlé set the final pricing related to their market competitors so Nestlé price do not have impact on the company policy , and other marketing activities.  

The Pricing objectives are separating into different oriented. The first is profit- oriented which help to achieve a target return and maximize profit. The second is the sales-oriented which help to stabilize prices and maintain or increase market share. The last is status quo-oriented that help to stabilize the prices, to meet competition, to standardize their quality such as in the recent research Nestlé juices is market leader in the soft drink market, to stay Long...
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