Pricing Strategy

This week's topic on pricing and value has given me an insight into the complexity of pricing strategy. Coming from a hospitality background, I understand the key issues in pricing a service. Hotels do use pricing to steer demand to periods when occupancy is low. From a marketer's point of view, this pricing strategy makes a lot of sense. However, having left the industry, I now understand how customers may feel cheated on with these price fluctuations.

The lecture talks about how banks try to optimise ARGE by setting special interest rates to entice customers to save. This is done when banks need to have a certain level of asset (ie. cash) in order to enable them to give out loans. Last week when I browsed the Commonwealth Bank's website to check for interest rates on my nearly maturing term deposit, I stumbled upon a promotion that made me feel 'ripped off'. I signed up for their NetBank Saver back in early 2010 as I discovered they offer excellent value in a 'flexible' deposit, where I can seamlessly manage my fund with no restrictions on time. However, the bank's new promotion offers a special bonus variable interest rate of 5.75% for the first 3 months of the account opening, which is 1% above the rate that I am currently getting.

Marketers must bear in mind the impact their pricing strategy has on their customers. If they value their customers, marketers must thread lightly when utilising price as its main strategy to gain market share and/or increase profitability.