Strategic Direction of Price & promotion-Nike

Running head: DIRECTION OF PRICE & PROMOTION 1
Strategic Direction of Price & promotion-Nike
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DIRECTION OF PRICE & PROMOTION 2
Strategic Direction of Price & promotion-Nike
Introduction
Every brand is looking to come up with an effective pricing strategy. This pricing
strategy must be aligned with the promotional strategy to the brand. The purpose of the effective
strategy and its alignment with the brand's promotional process is to create value for customers.
Obviously, the price of the product or brand is to be communicating with customers. Pricing is
an important element of the marketing process. Comparing and contrasting different pricing
strategies seem interesting to understand the relationship between promotion and pricing.
Pricing Examples that Influence Promotional Strategies
 Premium pricing
The premium pricing is a process of setting the high prices of different products or
services to create the favorable brand perception in the market. Usually, a group of customers in
the competitive market perceives that high priced products are containing the high quality and
value, and it can streamline the social status. For example, Apple Inc depicts the premium
pricing strategy in the mobile phone market. It influences the promotion of the brand, as the
company hits the perception of customers in promotional activities (Moon, 2016).
 Penetration pricing
The penetration pricing refers to keeping prices of product and services low initially. The
firm wants to grab or convert the immense range of customers due to lower prices. It can be set
for a while to increase the sales as well. For example, Wal-Mart is using the penetration pricing
strategy to drive its sales and retain customers. Penetration pricing is also a promotional tool for
the firm. The firm is looking to tell customers that they can buy high-quality products at a low 
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price. The promotion of the product is quite different when using this strategy, as target
customers are different.
 Economical pricing
The economy pricing strategy is used for the selected or a particular group of products.
This pricing strategy is widely used by many brands to target particular customers. It is a
comparatively good strategy lifts several product lines and enhances the visibility of sales. The
promotion can be streamlined by the firm differently as compared to the above strategies because
the message is specific and related to a particular product.
 Psychological pricing
Psychological pricing is attractive pricing strategy. It relates to the customer’s psyche.
Customers are attracted by this pricing strategy. An odd price such as $19.99 is an example of
the Psychological pricing. Comparatively, it is the most interesting promotional trait. For
Instance, odd numbers in advertisement tell customers that prices are lower than other brands.
 Promotional pricing
The promotional pricing strategy is the best sales strategy as well. The firm reduces the
prices of products in the form of discounts for a short time to attract customers, sell the stock,
and streamline the product in the market. As compared to all, this strategy can be aligned with
the promotional strategy interests. When communicating with customers and promoting the
brand, the firm can tell them that it is offering low priced products to meet the needs of
customers. It makes customers assertive to make positive buying decisions.
Pricing Strategy presented by Brand & Effectiveness
Nike is using the premium pricing strategy in the competitive apparel and footwear
market. The firm sets the high prices for its customers to let them create the positive perception. 
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Target customers of the company are sportsmen and athletes. The biggest advantage that the
company has gained through this pricing strategy is the differentiation. The firm wants customers
to feel the difference, and therefore, they are ready to pay high prices for products. Nike is using
these pricing strata because it is effective for it. For Instance, customers are paying high prices
for products. It increases the revenue streams and profit margins. Comparatively, in the
competitive industry, the firm has a good financial capital to contain some improvements and
ensures the business enhancements. Also, the cult status in the customer's mind makes them
assertive to make repetitive buying decisions. Thus, all these elements make this pricing strategy
effective and suitable for this company (Mourdoukoutas, 2015).
Aligning with the Messaging Strategy
The message strategy of Nike is based on the high brand image and positioning. In the
communication process, the management of the Nike Company wants customers to perceive the
products as prestigious. For Instance, in different campaigns on both traditional and social media
channels, Nike always streamline its prices to depict its quality. Of course, 


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