Price

Pricing is probably the most important issue that needs to be addressed. You don't go over price your product and loose customers or cut yourself short; you need to understand and capture customer value. “Customer value-based pricing uses buyers’ perceptions of value, not the seller’s cost, as the key to pricing.” (Marketing: An Introduction, Armstrong & Kotler, Page 6 Chapter 9) If your customer doesn’t see the value in your product then they aren’t going to buy it unless it’s at bargain pricing, that’s why you have to pricing it accordingly or improve it so can raise pricing if needed. Competition also factors in a lot when you have to decide on how you are going to set it properly. “Setting prices based on competitors’ strategies, prices, costs, and market offerings.” (Marketing: An Introduction, Armstrong & Kotler, Page 16 Chapter 9) But this also comes back to customer value, if you customer sees the value in your product, they’ll purchase it even if it might be a little above your competitions pricing. Everything in your marketing plan goes into your pricing such as target markets and the product itself in production/distribution/promotion. Since we are a relatively new business we need to get proper market penetration as well and there’s a pricing strategy for that as well. Market-Penetration Strategy is “Setting a low price for a new product in order to attract a large number of buyers and a large market share.” (Marketing: An Introduction, Armstrong & Kotler, Page 27 Chapter 9) This is a very important factor and is a good way to push ourselves into the market and a beginning.

Koot’s Brüt Vodka will probably begin with a price at about 18 bucks for a 750ml bottle, which is about 2 dollars cheaper than Smirnoff because they are our biggest competitor. When consumers begin to purchase our products are develop a value for this product, we can bring it up to the 20 dollar mark right along with Smirnoff.