Also, Sony Corporation uses coupons as
a discount. If you want to, but with Sony phone, you need to enter the code,
and you will get a discount. Also consumer can get the discount if she/he buys
the product on the internet the price will be lower than if product will be
bought in the store.
On the official Sony website, it also
can be found a lot of stocks. For example, now in Russian, official Sony
website is an interesting offer, if consumer buys Sony Xperia phone he gets the
MicroSD for 64GB. Furthermore, Sony provides free delivery if consumers order
the phone on the internet.
Discounts are based on a corporate decision or the store that runs a sales
promotion on the Sony Discounts are offered sometimes during the peak seasons
like Christmas, Sports seasons, and seasonal discounts are provided as well.
When competition is heavily involved, such as around Black Friday, Christmas,
etc., these promotional discounts are a "steal."
What about pricing tactics!? Sony Corporation uses skimming pricing
for Sony phones. It is easily to acknowledge when a new phone is released. New
Sony phones are always with the high price, because it is new innovations and
they want to get high profit from its product. They want to gain customers who
will pay any price to get new product, and there are a lot of customers who are
ready to buy new Sony phone for this high price. But after some time price
become lower, because Sony produces new phones and they focus on this new
product sale. Over time the price is lowered and customers who wasn’t satisfied
with the high price, but wanted to buy a new Sony product can afford to do it.
Influence of marketing mix on the price.
Marketing mix has very big impact on
the price. For example, product. If product I innovative than price will be
higher. The level of price depends on quality of phone, on its characteristics,
for instance memory, the bigger memory size the higher will be price for the
same phone. So it is the same for Sony phones.
Promotions. Promotion if marketing mix
has an impact on pricing decision, because promotions contribute the
positioning of the brand on the market. So if Sony spend a lot of money to
promote Sony phones, phones have higher position on the market and it means
that price will be higher too. And it works in a back way too, less money spent
on promotions à lower position à
lower price.
Place. The location of Sony Corporation
clients is very important for the company. The head office is located in Japan
and the closer is their clients to Japan the lower transportation costs will
be. Transportation costs affect the pricing decisions. If these costs will be
high, then the costs of Sony phone will be higher too.
Physical evidence, people and process.
The pricing decisions are influenced by these three elements of marketing mix.
For example, decisions are made by the family members, which model of phone to
buy. Family can choose expensive or cheap model of Sony phone; if they want to
have phone with good quality and better characteristics they will buy more
expensive phone if they can afford it, but if they want phone just with the
basic functions, without some cool stuff they will buy the cheapest one. The
pricing will vary because the type of consumers willing to buy phone will also
be different.
There are two main strategies low cost
or differentiation. In the low cost strategy, the company needs to know all
about the prices and should understand how to work with this information right.
A true winner is the company with the lowest cost in the market. If on the
market are companies with the same product, the company which has lower price
will win. But in differentiation company must totally understand its customer’s
needs. Differentiation involves being perceived by the market place to
understand better consumer’s needs.
The Sony is a combination of low cost
and differentiation strategies, which is well in the market. It means that Sony
Corporation actually understands their consumer needs and they know what kind
of product their consumers need. Also Sony has a lot of competitors, like
Samsung, and actually these two companies produce almost the same product, but
to compare prices of Sony and Samsung prices of new products, Sony phones are
cheaper and quality is better than Samsung. So for now when Sony and Samsung
release a new innovation phone Sony phone is cheaper than Samsung.
The price elasticity of Sony phones...
“The price
elasticity is the degree of responsiveness of the quantity demanded of a good
to changes in price of a good. A product is known to be elastic if the
consumers are sensitive towards to changes in price. Conversely, a product is
inelastic when the consumers are not sensitive towards the changes in price.” Smartphones, is a
luxury good, people cannot change phones every day, so Sony phones has an
elastic demand.
There is an information
that people wouldn’t buy phone if the price would increase by 50%. After the
questionnaire the result of price elasticity of demand was higher than 1, what
indicates that smartphones have an elastic demand.
Literally consumers are sensitive to the price changes. And they wouldn’t buy
Sony phone if the price would be higher, the phone isn’t the first needs thing.
Here we can see the
number of quantity of Sony phone sales per unit(million).
Year
|
2012
|
2013
|
Average price of phone
|
300 euro
|
350 euro
|
Sales per unit(milliona)
|
7.9
|
10.8
|
·
The percentage change in price of Sony phones = (350-300)/300*100 =16.67%
·
The percentage changed in quantity of sales per unit = (10.8-7.9)/7.9*100 = 36.7%
·
Price elasticity of demand = 36.7%/16.67% = 2.2%
These calculations are the proove
that Sony phones has an elastic demand. As we can see elasticity of demand is
higher than one, it means that Sony phones have an elastic demand.
The manufacturer can
influence the consumer price by eliminating wholesalers. If they would do so,
they would lower consumer price, but also if they would remove the wholesalers
they will then have to do the services offered by the wholesalers. Of course,
wholesalers can be eliminated, but there still will be functions which perform
wholesalers. If Sony Corporation will
remove wholesalers other channel member would have to perform services which
wholesalers provides and it can be problematically for them and also for
customers, because they will still pay for this services which can be in bad quality,
because retailers (for example) cannot provide services what provides
wholesalers, it is not part of their work and they are not good in this area.
Also manufacturer then should hire more personnel and costumers might stop
paying for the product, because prices would reflect the costs of less
efficient members. It is the way how manufacturer can influence the consumer
price. But in my opinion, it is not the best way to remove one channel member
and give its work to another channel member.
