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Marketing Mix Pricing Strategies Research Paper

Marketing Mix, Pricing Strategies Segway Marketing Strategies

The Segway appeared as a response to the quickly changing environment and shifting features of consumer demands. Expected to revolutionize the traveling habits, the Segway failed to retrieve the desired outcomes however. The two-wheeled electric gadget is produced by Segway Inc. And it is based on the invention of Dean Kamen. The reasons for the failure are unclear, but one could point out a poor marketing campaign, high costs of developing, leading to high prices; the current price of a Segway within the United States ranges between $5,350 and $6,400 (Segway by the Bay, 2008). To ensure a future success for the traveling device, certain aspects of the marketing mix should be reconsidered. Some suggestions are presented below for the 4 Ps of marketing (product, place, price and promotion), with emphasis on pricing methods and strategies.

Product

The product strategies must be focused on the benefits the Segways offers its buyers: reduced costs with fuels, speed and the ability to reach destination on time, avoidance of traffic jams, better protection of the environment and no troubles with finding a parking spot. The product placement strategies should focus intensively on the ingenious features of the item and also on the organizational brand.

Price

The pricing strategies to be developed and implemented by Segway Inc. are rather difficult to establish generally due to the challenges faced by the manufacturer. These difficulties generally revolve around the ingenious nature of the product, which can make it problematic to properly address and identify the target audience. The second most important aspect that raises difficulties, and extremely relevant in the context of pricing strategies, is that of rather reduced revenues. Since the company did not meet its set sales objectives, they are now encountering financial limitations, which require increased attention and a well developed and implemented pricing strategy. From this standpoint, the manufacturer could choose to increase...

However, the already high price of the Segway is one of the issues that have lead to the current situation and an additional increase would not be desirable. Consequently, it would be best for the organization to try and achieve a price reduction. This would result from a decrease in the administrative and operational costs. Administrative costs would be reduced through an increase in the operational efficiency; operational costs would be decreased if the company outsourced their manufacturing operations to less developed countries.
Considering that the cost reductions are achieved, the Segway Inc. should implement a retail price of no more than $4,000 per vehicle, with the latest innovations and the most endowments. The cheapest Segway should not be more than $3,000. The pricing strategy should be somewhat similar to the penetration strategy. This often occurs in the case of newly launched items, which are sold at lower prices than the competition's in order to attract customers. The strategy also sees that in time, as the customer palette is better consolidated and stable, the manufacturer will adopt a new approach, aiming to make increased profits, rather than attract new customers. The penetration pricing strategy could be adapted for the Segway, even if this does not fit the characteristics of a newly launched items and the ultimate purpose would be the same.

Once the cheaper item is able to attract sufficient customers, the manufacturer would be able implement a variable pricing strategy. This means that the retail price to the end consumer is built on the multitude of costs incurred in its production and distribution, such as the costs of commodities, the taxes paid to the local and national budgets or the costs with the employees. The retail price must also include a profit for the manufacturer. Increased attention must be placed on the correlation between the pricing strategies and the life stage of the product. For instance, the Segway is now in its incipient stages,…

Sources used in this document:
References

Kawamoto, D., September 29, 2003, Segway sales haven't transported maker, News.com., last accessed on February 22, 2008.

Jackson, G., December 19, 2007, Segway's new way, McClatchy - Tribune Business News, Retrieved from Proquest database on February 22, 2008

2008, Product, Segway by the Bay, http://segwaybythebay.com/index.php?p=view_category&category_id=2last accessed on September 23, 2008

2008, The Marketing Mix, Net MBA, Business Knowledge Center, http://www.netmba.com/marketing/mix/last accessed on September 23, 2008
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