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Net-a-Porter - Case Study Example

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Net-a-Porter Contents Introduction 3 What are the considerations that need to underpin decisions on the pricing strategy? 3 What are the advantages and disadvantages in establishing theoutnet.com as a discounted distribution channel? 6 Net-a-Porter launched a new venture - Mr Porter – offering fashion clothing for men…
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Download file to see previous pages... Since its launch in the year 2000, the company Net-A-Porter have been able to successfully establish itself as a premium luxury brand selling online designer fashion clothing for women. Net-A-Porter with its innovation strategy along with highly developed offering have been able to achieve huge success and had also won award for the best shop at “British Fashion Week” and the best e-retailer in “UK Fashion Export Awards.” The online fashion retailer sells more than 150 top luxury fashionable brands and offers express delivery throughout the globe and delivery the items on the same day in Manhattan and London (Net-A-Porter, “About Us”). The paper aims to discuss the case study on Net-A-Porter and answer to some of its question in relation to the brand and its strategy. Therefore below are the answers to the questions asked for in the case study “Net-a-Porter.” What are the considerations that need to underpin decisions on the pricing strategy? Pricing is one of the 4ps that a marketer needs to take into consideration before deciding on the strategy. It is an important aspect of marketing and also for branding strategy as it tends to be one of the first indicators of brand positioning for the consumers and also regarded as the most flexible Ps. It has been seen that prestige and luxury brands adopts the premium pricing strategy in order to emphasise the strength of the brand, high quality associated with luxury goods which also helps them to differentiate from mass fashion brands. The target audience for the luxury brand are comparatively less price sensitive and actually expects that luxury products to be highly priced rather than to be priced economically. Pricing tends to form branding process as the consumer tends to judge the position of the respective brand and its value through the adopted pricing strategy. In addition, luxury brands are those brands whose ratio of functionality towards price is low and the ratio towards situational utility and intangibility with respect to price seems to be high. This indicates that price of premium products is relatively higher as compared to the price of products having similar kind of tangible features but with high intangible quality along with associated benefits of premium products teds to justify the high price (Okonkwo 140). In addition to the above consideration while deciding on the pricing strategy, Net-A-Porter is an online luxury brand and thus online pricing premium strategy is also a consideration for the brand. The premium pricing strategy involves setting a higher price as compared to similar products. The premium pricing strategy also referred to as skimming pricing strategy as it is an attempt to “skim the cream” from the market. Based on the above definition Net-A-Porter premium pricing strategy will help it to maximise profit in areas where the customers are willing to pay more for the desired product. In the process of adopting the premium pricing strategy, price quality signaling is also an important and essential factor. With the premium pricing strategy Net-A-Porter can use to improve its brand identity in the specific given market. The higher price the brand demands signifies highest quality product and thus it will be convenient for the brand to charge high price. The next consideration is the level of competition among the brands in the same product segment. Premium pricing is a short term strategy; the longer ...Download file to see next pagesRead More
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