Pricing Strategies: Strategic Tool to Sustain in Competitive Market

Abstract

Business level strategy determine whether a firm will be successful or fail in the long run. Successful firms follow one of the three generic approaches such as Competing on costs, or on differentiation in the broad market, or by focusing on a narrow segment of the market. An overall cost leader will generally use low price as an important element in their strategy to capture the market. Competing on superior values (both tangible and intangible), is called a Differentiation Strategy. Company which follows a focus strategy compete in a well-defined segment of the market and will either be a cost leader or a differentiator in its chosen segment market. Study of a portfolio of different brands and pricing structure of HUL, Dabur, P & G, L’Oreal, and Patanjali for selected personal care products revealed that these companies are using combination of strategies to capture the market. HUL & Patanjali are using cost leadership policy for majority of skin care and hair care products. Whereas P & G and L’Oréal are using focused cost leader or a focused differentiator strategy to retain and attract their consumers.