Widmer Brothers Brewing- Pricing

Widmer Brothers Brewing - Pricing

Introduction

Today , companies carefully manage value to gain competitive advantage These efforts focus on both actual and perceived value of a product . The example of Widmer Brothers Brewing shows that pricing should be carefully determined in to concentrate on internal company operations and efforts directed toward customers . Price is one of four br

's which has a great impact on the target market and dictated by this target market

Price Defined

According to Crawford (2003 ) prices are the terms of exchange among goods and services

, and price policy is a central element in the marketing program of any company . Under competitive conditions , prices are determined primarily by costs . Researchers explain that prices may vary as part of the marketing policy of a company and costs may vary correspondingly (Crawford 2003 . The relationship between a company 's prices and the costs and prices of its competitors is an important element of marketing strategy . Usually , customers purchase many different products and services , and rarely familiarize themselves with all the details of each item 's design , production and delivery . Instead their value judgments about the product are influenced by an analysis of basic product benefits including weight , size or taste . These judgments can also be significantly affected by packaging , advertising , sales and service personnel , the sales environment , brand names , price promotions price reductions and a variety of other factors under management 's control (Crawford , 2003

Pricing Strategy employed by Widmer Brothers Brewing

Widmer Brothers Brewing follows pricing strategy which allows the company to remain competitive and deliver high quality products to its customers . The decision on price level is based on competition , economic situation in the region , inflation rates and customer segments . The company uses demand-based pricing which helps it to compete with its direct competitors , like Budweiser . In general , the company 's pricing takes account of potential cost and demand . Widmer Brothers Brewing adopts price lines that indicate differences among the products and divide the potential customers into market segments . Conversely , Widmer Brothers Brewing offers low prices on some of its products (brands ) to attract customers who will purchase other items as well (Carroll Swaminathan . 2000 Crawford , 2003

In contrast , its direct competitor , Budweiser , follows variable-price strategy which is closely related to the strategy of market basket pricing (Crawford , 2003 . The example of Budweiser shows that the best combination of prices for products may remain unchanged from one period to the next (Milici 2000 . Further , effective use of a variable- price strategy is not limited to situations in which the individual customer purchases different products . According to Crawford (2003 , the periodic use of "sale " promotions attracts to the firm the attention of various buyers , including those who purchase only the special- price products and those who purchase of it . The second competitor , Redhook (and Widmer Brewing 's partner now ) used skimming strategy to attract potential buyers . Shipman , President and Chief Executive Officer of Redhook reports "We continue to execute our pricing strategy involving a reduction in...