Beas Pricing Dilemma

Topics: Marketing, Pricing, Price Pages: 8 (1892 words) Published: December 4, 2014
I. Point of View
We consider Ms. Bea Lim’s perspective, the Marketing Assistant of Prime Meat, Inc. as our point of view.
She is the one envisioning on the pricing strategy formulation that would have a long-term beneficial effect to the company.

II. Market Situation Analysis
A. Opportunities-Threat Analysis
1. Opportunities
Strategic Location - The location of Prime Meat, Inc. is Santo Tomas, the town next to the capital city. Large Market Potential - For tocino (89.312 metric tons per month) and hotdog (95.14 metric tons per month) products. 2. Threats

Competing brands - There are many brands that have more or less the same offering and quality to their products. Competitiors: Lipenos Pride, Carmen’s, Emma Homemade Meat Products, Tita’s, Mekeni, and Pampanga’s Best. Low differentiation of the products.

Market Share – The consumer do not consider Prime Meat Hotdog as a favorite hotdog brand.

B. Strength-Weakness Analysis
1. Strengths
AA accreditation
Discount offerings
Good promotion
Good survey result
Increase in production volume
Regular dealers
Separation from mother plant
Transport of products by branches
2. Weakness
Popularity in the market
Price correspondence in quality
Small scale production

C. Product Life Cycle
1. Prime Meat Tocino: Growth stage since it already follows Pampanga’s Best. Objective: Improve market penetration ahead of competition.

2. Prime Meat hotdog: Introductory stage since it is not included in the set of favorite brands. Objective: Persuade consumers to buy the product.

D. Target Markets
Class B to C income group levels – Their main consumers are the members of LCM Cooperative.

E. Product Positioning
1. Price Aspect: Prime Meat Inc. products are currently positioned lower compared to other brands. Result: Prime Meat Inc. is perceived as “Low quality product” because some consumers associate low price for a low quality.

2. Product Aspects: Prime Meat tocino is considered next favorite brand for consumers next to Pampanga’s best for the best brands in terms of important tocino attributes, Prime Meat positioned next to Lipenos Pride and Pampanga’s best. Result: Tocino is perceived as high quality, low price product. Hotdog is perceived as low quality, low price product.

F. Current Marketing Mix or Marketing Strategies
1. Product Strategy
Prime Meat Inc. has a total of 14 processed meat items
The company’s carrier products are hotdogs, tocino, tapa, and longganisa having the biggest share of sales. Prime Meat Inc. offers best quality product that thei AA accredited plant produce.

2. Place/Distribution Strategy
The company distributes products through LCM branches all over Southern Luzon and portions of Central Luzon that both carries processed meat products. They also have regular dealers and walk-in dealers who sell their products in respective areas. And dealers follow certain terms and conditions set by the firm. These are all contained in a signed dealership contract. The Figure 1 below shows the distribution of outlets.

3. Pricing Strategy
The company uses mark-up pricing to determine what is the suitable price for their products. Raw materials, packaging, labor, and overhead in cost calculations are the factors considered in pricing a product. The company used 15% mark-up policy for the pricing of all their products which is prime meat.

A taste and product sampling was conducted by Ms. Bea Lim to determine the price expectation of the consumers. The outcome is that, Prime Meat’s Tocino and Hotdog are perceived to have higher prices than the current prices. A 250g Tocino is priced P32.00 while a 250g Hotdog is priced P37.00. This means that consumers, with respect to the satisfaction they get from those products, are willing to pay at those price levels.

4. Promotional Strategy
The company does several promotion strategies in marketing its product. For the members of the LCM cooperative, they provide an outright...
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