Strategic Marketing Basics
The association of Bordeaux wines ( http://www.bordeaux.com/us/wines ) is raising questions about the pricing strategy to be followed by its members.
The product range of Bordeaux wines is very wide, stretching from the most famous vintages of the world to excellent, good and fair quality wines. There also remains some low cost production domains.
For what 1st rate "grands crus" are concerned prices are set by the market exchange (law of offer and demand), so the question on "how to position the prices" holds for the great majority of producers and traders.
Competition is tough, both local and international, and markets are both domestic (France) and global.
Questions:
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Which price setting method should be considered here: market-based or profit-based ? Why ?
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Based on your answer at question 1, how would you apply your chosen method in practice ?
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Do you think that "skim the cream" pricing or penetration pricing would make sense or not in this case ? Why ?
