Effect of Overpricing with Different Combinations of Other 3 Ps - Essay Example

?Effect of Overpricing with Different Combinations of Other Three Ps Analysis In this analysis, the main focus is on how the overpricing is influenced by different scenarios of other three Ps that were involved in the simulation. It also shows the difference it could make in selecting a appropriate target market for the balance of 4 Ps that one wants to set. What I have done throughout this simulation, is to overprice the backpacks that I have to sell except for the first turn where I sold the backpack on a reasonable price to further compare the result with over pricing.What happened in my first turn was that even though the price that I had set was reasonable enough as other backpacks that are available on the market. I had set the price of black backpacks that I have targeted the teenagers with to 25$. The distribution channel I set was selective as I was targeting a specific area of the target. The promotion medium I used was through billboards. Even though the price was low, I still lost money in the end because my target market was not the one which was well endowed in the cash department. Rest of the simulations, I wanted to test my area of overpricing the backpacks with different target market and different marketing mix. In the second simulation of mine, the backpack that I was making was targeted towards professional athletes. This time, the distribution channel I used was still selective and the promotion method I used wascommercials. The result was that, I was able to make profit out of this scenario even though the price that I had set was 50$. What I had made of getting the profit out of overpricing was the fact that my target market is on the rich side of the spectrum. On third simulation, the thing that I did different from the second simulation was that that I have set up the promotion of the product through internet. Although the sales were good this time also, but the end result was that I didn’t make any profit in the end. What I gathered from this was the fact that correct promotion medium is also very important while targeting a specific set of people. Most of the athletes watch TV in their free time due to which profit was made on the sales. From the experience that I have gathered in the previous set ups, I again decided to try my hand on the teenage market. What I did different this time was that instead of pricing the backpacks reasonably, I overpriced the bags at 50$ per unit. And another thing I did different here was that I had made the promotional medium to be internet ads. What I figured would be different this time was that the teenagers tendency to spend time on internet and social media sites would eventually result into them getting more aware about the product, and the psychological play in increasing the price which would lead them into thinking that the product is the one that they must have. I don’t know if the simulator takes the psychological factor into consideration but my changing the medium of promotion actually worked as this time I was able to make a profit out of it. In my fifth turn, I wanted to take it to a different level where I wanted to experiment with the distribution or place aspect of the simulation. I took the details of targeting a sports athlete where the price of the bag was still 50$ and the promotion medium of the backpacks was TV commercials where I had made a profit. This time the distribution channel I used was intensive distribution where the product was in the majority outlets and the dealership was not specialist for the product. In the end the sales were low because of the product being in every outlet where there was no need to put it and the fifth turn ended up making loss. In the sixth and final turn, I again used intensive distribution with the successful simulation for teenagers and still ended up in loss. In the end what I had garnered from the whole analysis was that there had to be a right mix of 4Ps with the correct target market. Reflection What was done in the simulation was trying to come with different ways to make profit with the products we were given to sell in that part. What my personal experience was in selling that the profit would be made if you had the right marketing campaign for the right distribution channel on the different target market. What I had observed in all these simulation was that pricing had little effect on the profits that I made in the end. Even with overpricing the bag, I was able to find the right mix between the four P’s and in the end I was able to garner profit from all the target market. I have also seen this that many products are not able to get off the bat to make profit due to the fact that many of these products did not use the right fit in how should they be marketing to different target market that they have set for their products. It was also the case that many of the targeted market were not able to get access to the product because of the wrong distribution channel used by them. I myself have been the subject of thiswhere I was not able to get access to the product I desired because it was unavailable. It is also a fact that in order to succeed in making a profit, even if the promotional or distributional channels are in some way inadequate, we would have to offset the pricing in a way that it would still yield a profit in the end. In my personal experience, the four Ps are vital in discerning a profitable product to the one with loss; and proper promotional and distributional strife should be made in order to succeed in a business. References Gummesson, E. (2008). Total relationship marketing. Amsterdam: Butterworth-Heinemann. Appendix Turn Target Market Product Details Price Distribution Promotion Outcomes (e.g. profit, market share, market rank, units sold, revenue) Initial decisions Teenagers Black Backpack 25$ Selective Billboards Loss Turn 2 Sports Athletes Black Backpack 50$ Selective Commercials Profit Turn 3 Sports Athletes Black Backpack 50$ Selective Internet Ads Loss Turn 4 Teenagers Black Backpack 50$ Selective Internet Ads Profit Turn 5 Sports Athletes Black Backpack 50$ Intensive Commercials Loss Turn 6 Teenagers Black Backpack 50$ Intensive Internet Ads Loss Read More