PRICE Stella should both adapt then standardize her pricing to achieve the most success from this
LOWER Quality
HIGH Quality
Economic Pricing
Price Penetration
Price Skimming
Premium Pricing
price will be the most beneficial in New Zealand to achieving objectives (especially market share in the long-term) (section 4.2) and maximizing growth (Figure 11).
LOWER Price
international expansion. Setting a low price (penetration pricing) before slowly standardizing
STRATEGY 5.2 STRATEGY IMPLEMENTATION: IMPLEMENTATION: PRICE PRICE
• Engage customer and develop an understanding for the competitive environment (Kapferer, 2012) (Pwc, 2020). • Lower price to meet economic constraints: recovering consumer confidence since Covid
HIGH Price
Adapt: Price Penetration
and a social spending slightly lower (19.4% of GDP) than OECD countries (OECD, 2021) Figure 11: Price Positioning Matrix (Authors own, 2020) Standardization: Premium Pricing once established in the market (8-12 months) • Stella can increase brand globalization and improve communication flow • Economy expected to rebound fully in 2021 (Smyth, 2020), Stella can capture increased spending with higher price point. • Premium pricing solidifies Stella’s position in the luxury market; Communicate value creation, superior brand performance & ethical practice (Kapferer, 2012)
Lowering price before progressively increasing price and the volume sold until demand ceases to grow, will help Stella to establish the NZ consumers ‘symbolic value’ (Kapferer, 2012). Once standardized, the price territory becomes fixed and becomes a global price strategy (Kapferer, 2020). Increasing prices however is risky as new customers may switch to competitors and may result in a decrease in demand since luxury fashion is price elastic (Kapferer, 2020).
