Pricing Strategy

Answer of Question No 1

Pricing objectives of Pampers:

1. To capture the Diaper market: Disposable diapers were used less than 5% before launching the pampers Uni if P & G. So P & G had opportunity to enter into the Brazilian market and they launched relatively cheap and high quality Uni. 2. To retain the position: Proctor and Gamble company lost their market position to the Kimberly Clark so it changed its pricing objectives to retain the market position and it broadened its product range, introduced Super-Seca, and unveiled Confort-Seca which price is lower than inexpensive Uni. 3. Be competitive: Proctor and Gamble Company also charged that amount of price which made them competitive in the diaper market.

Pricing objectives of Huggies:

1. To penetrate into the market: Kimberly Clark adopted the penetration policy for its setting price because Proctor and Gamble launched Pampers Uni before. So to penetrate into the market they charged low price. 2. To grab the competitor’s market share: Then Kimberly Clark grabbed the most market share of Proctor and Gamble of the diaper market of Brazil by alliance and perfect co-operation.

Ans. Of ques. No 2

Pricing approaches:

1. Competition based: Competition based pricing approach is used when prices are charged by the other firms in the same industry or market. In the mentioned price war Proctor and Gamble and Kimberly Clark competed with other based on the price. 2. Value based: In the mentioned price war value is also considered. The two companies offered greater quality products as well as low price.

Factors lead to Price war:

* Competitors’ product’s price * Economy of the country * Customers’ perception of value * Alliance * Price cutting policy of firms.
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