Marketing Research and Marketing Strategies - Essay Example

Consumer psychology being used as a factor to charge a high price is a strategy known as premium pricing. It might be assumed that this kind of strategy would be used to skim the market and take as much profits as possible and finally will have to be abandoned. This hypothesis is, however, incorrect to assume. As Smith (1997) alludes, a premium pricing strategy might not simply aim to skim the market but rather maintain a high-priced brand value without straining the consumer to an extent leveled with the skimming strategy.

If the company prices its wines at a price much higher than the actual cost, but keeps it within affordable limits of the targeted market segment, the product is likely to establish a significant brand value. Brand value, however, is dependant on the kind of dependentment that has been done and the branding cost to establish the product while pricing itself is an independent variable as the actual costs of the product are not a deciding factor. Brand value in the example research was measured by a mere exhibition of cost to the sampling participants.

The assumption of a better reputation and taste based on the cost confirms the premium pricing method for the product to be an effective technique that utilized the expectation of the participants from a high-priced wine to be better in taste as per Emmerich’s (2005) research. Other variables, as Emmerich (2005) states, that could affect the results of such a strategy include competitive forces; competitors will have the advantage to sell their products at lower prices and continuously challenge the price of the product.

Researchers could have meResearchersparison with competitive brands as an additional variable. An experiment to test this will require each participant to test and sample the wine qualitatively only knowing the tagged prices and not the actual prices. The given example employed a simple random sample of 20 participants, in a with-in-subject design with-in-subject in comparison, so as to carry out the which means a sample that size is too small to generalize the results. A bigger sample or repeated experiments would even out any possible coincidences and get more even and reliable results. Conducting a similar research, the recommendation to the company would be of choosing a greater sample size to better determine the premium pricing strategy results for the product.