How should the pricing strategy support the "Positioning" strategy in order to achieve success in service quality?

Product Positioning Is Essential for All Businesses

A company must be careful not to "overposition," which can be defined as making promises about features and benefits that the product or business does not always deliver. Over positioning can also mean making promises about product features and benefits that are not apparent to users/buyers.

You must also avoid "underpositioning," which can be defined as failing to describe all the features and benefits that the product or business delivers or has, or failing to describe distinctive product features and benefits that are apparent to users/buyers.

Also, it's important to avoid confusing people with product or service features and benefits. Features are the descriptors of a product (e.g., colors, smells, shapes, packaging, prices), while benefits are what the product does for its buyers (e.g., satisfaction, more confidence, more beauty, faster task completion). It's often better to single out a few key features, rather than overwhelming the customer with lengthy lists of details.

  Example

FargoGas: "Fastest gas in the West!"

Everyone who drives wants to fill up their gas tank quickly, cheaply, and conveniently as possible. A small local gas company (in Fargo, ND) with one or two local service stations could differentiate itself from its competition by advertising its business as the fastest fill-up service, with on-premise signs, handouts, premiums, T-shirts, local tie-ins, and other reminders. The gas tank pumping islands could be maintained at maximum pressures and speed of filling at all times, with the most powerful gasoline pumps available.

Premiums, given away with every 25 and 100 gallons, credited on a frequent filler card, could reinforce this positioning:

• road-runner logo-imprinted handiwipe cloth with the company slogan
• baseball caps or winter sock hats
• model cars, boats, motorcycles, etc.

If the station's target consumer is primarily male and 16-49, then local celebrity speeders (e.g., dragsters, racing cars, motorcycles, etc.) could exhibit their vehicles at the station. Logos and slogans on the vehicles could also promote the station's market positioning. Further protection could be gained by ensuring that prices are competitive with other service stations. A friendly "station personality" could be adopted by all employees, based on currently popular media figures.

If a local competitor decides to try the same approach, with the same equipment, they would have to work very hard and spend significantly more money to compete with the preemptive positioning of FargoGas as the "fastest" in the market.

Distribution Strategy Is Key to Successful Marketing

Part of the challenge of marketing is figuring out which distribution method to use for your business. As soon as you decide which business or product category to compete in, distribution decisions must be made based upon what your competition is doing.

Service businesses may or may not be subject to the same physical distribution limitations as product-based businesses. For example, financial planning services may be offered from printed material, sold at retail, sold by consultants face-to-face, or delivered electronically by computer, by phone and by correspondence — a multitude of different distribution systems.

Distribution decisions have significant implications for:

• product margins and profits
• marketing budgets
• final retail pricing
• sales management practices

Distribution channels can include one or more of these options:

• retail — stores selling to final consumer buyers (one store, or a chain of stores)
• wholesale — an intermediary distribution channel that usually sells to retail stores
• direct mail — generally catalog merchants that sell directly to consumer buyers at retail prices plus shipping (e.g., Land's End, L.L. Bean) via mail
• telemarketing — merchants selling directly to consumer buyers at retail via phones
• cybermarketing — merchants selling directly to consumer buyers at retail prices, or business-to-business products and services at wholesale prices via computer networks
• sales force — salaried employees of a company, or independent commissioned representatives who usually sell products for more than one company

Thanks for invitation

I think area different from place to other by social level & payment abilities & goods demanded  & other, so price must support location

There are many factors to consider when developing your pricing strategy, both short- and long-term. For example, your pricing needs to:

• Reflect the value you provide versus your competitors
• Match what the market will truly pay for your offering
• Support your brand
• Enable you to reach your revenue and market share goals
• Maximize your profits

Note: You can access guided pricing strategy templates and step-by-step instructions for writing the pricing strategy section of your marketing plan in our marketing planning and management app. Try it free!

When you offer a truly unique product or service with little direct competition, it can be challenging to establish your price. Define a strong strategy and competitive analysis so you can view:

• What your prospects might pay for other solutions to their problems
• Where your price should fall in relation to theirs

When your price, value proposition and positioning are aligned, you’re in the best situation to maximize revenue and profits.

Manufacturing and service firms need to find a business area that will allow them to be competitive in the marketplace.There are different positioning strategies through examples.Positioning StrategyWhat key words come to your mind when you think about companies such as Apple, Walmart and Disney? Most consumers would say that innovative products, competitive pricing and excellent service are synonymous with these companies. An important step in developing key operational strategies depends upon how a company positions itself in the marketplace. Every company can't satisfy every customer and also be competitive in areas like quality, cost, flexibility, speed, innovation and service.A positioning strategy is when a company chooses one or two important key areas to concentrate on and excels in those areas. A firm's positioning strategy focuses on how it will compete in the market. An effective positioning strategy considers the strengths and weaknesses of the organization, the needs of the customers and market and the position of competitors. The purpose of a positioning strategy is that it allows a company to spotlight specific areas where they can outshine and beat their competition.However, the requirements needed for a company to compete in the following areas: quality, cost, flexibility, speed, innovation and service. We will take a look at different manufacturing and service companies to identify examples for each and how they use their positioning strategy from an operational standpoint.Cost Positioning StrategyBigmart is not known for excellent customer service. In fact, it is almost impossible to find help in the stores. Bigmart is the biggest retailer in the world because they have aligned their operations to embrace a cost positioning strategy. Following this strategy, they focus on ways to eliminate any wasteful procedures within the company and pass the savings on to their customers.Bigmart has invested large amounts of money into operational processes that fully automate inventory, ordering and delivery procedures. Today, the entire cost structure is examined for reduction potentials, not just direct labor costs. Bigmart is successful because the operation cost savings allows the stores to offer lower prices to their customers. In order to remain cost competitive, Bigmart consistently invests in updating their equipment, software and training of their employees, as well as applications and procedures to streamline operations even more and stay the leader in their market.Quality Positioning StrategyMost companies worry about quality in a reactionary way by chasing after problems and defects. This can destroy a company's credibility in the marketplace by alienating customers and suppliers. Some smart companies choose to focus on a quality positioning strategy as a way of differentiating themselves from their competitors by using exceptional parts and materials and committing to minimal defects.Precision Auto Manufacturer heavily invests in their operations and procedures to create a high quality product. The company is known for only using top suppliers for their parts and utilizing high-grade material for their cars. The results are automobiles that garner an expensive price tag due to excellent quality materials and performance.

Sorry I am not specialist. I am SEO, Digital Marketing, WordPress, Web Development, Social Media Marketing specialist and IT. 

I agree with Ms. Ghada Answer and my last 2 cents as follow:

 

The Price Positioning Strategies have the following types:

 

Skim

This strategy clearly positions your company above the rest; it tells consumers something is special (i.e., worth paying more for) about your products. For example, look at the prices The Old Homestead restaurant has set for their steaks and chops. We can smell the fried onions and seared, aged prime meat already. We can envision the long white aprons of the wait staff and the impeccable table side service. To skim, set your prices higher than the competition does in order to “skim off” customers who are willing to pay more. This strategy can be highly profitable, but be careful: Though high prices imply high quality for many customers, it’s still critical that they understand why they’d pay more to stay or eat at your establishment.

 

Match

This strategy puts your pricing on par with the competition, but not necessarily for all rates. To match, set one rate comparable to your competition and another slightly higher. This allows you to stay competitive for a larger pool of customers, yet doesn’t undercut the competition.

Surround

This strategy positions your first room type as the cheapest in the market, but offers your rooms with better options at a price that’s close to your competitors’ first available rates. Hence, you’re “surrounding” the middle market, hoping to capture customers willing to pay in those ranges. For example, look at Sizzler’s $16.99 sirloin steak and lobster special.

Outback Steakhouse offers a similar item for $24.99, but uses a filet and includes two sides instead of one. Outback also offers a 6 oz. sirloin steak for $10.99. This strategy allows Outback to attract customers looking for an inexpensive steak dinner, while offering customers willing to pay more, well, more, but at a price far shy of Ruth Chris’s smallest filet steak at $35.

 

Undercut

By undercutting your competitors’ rates in some categories, you can potentially attract more customers. To undercut, offer a price that’s comparable to your competition and another that’s lower. Take this example from the hotel industry.

Both hotels are located near a major airport, both have the same star ratings and amenities. But look at their airport parking packages for 14 days free parking plus a room: $359 versus $189.  These hotels had very similar best rate rooms, but one has chosen to undercut their competition on this package, likely in hopes of driving more cost-conscious travelers their way.

 

Penetrate

 

Being the low-priced option in your market has benefits and drawbacks. The strategy is primarily designed to get people in the door and in seats. For new establishments, low prices often seem the best way to entice consumers to try their products. But this strategy also can depress market prices, lower margins, and set a poor precedent as your business grows. Do your prices reflect how consumers value your hotel or restaurant? Here’s what consumers see as they peruse online hotel options; those using penetration pricing certainly stand out.

Fully agree with Ms. Ghada

The pricing strategy should reflect the value you provide as defined in the positioning strategy. Should match what the market will truly pay for your offering, should support your brand and enable you to reach your revenue and market share goals.

agree with answers >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

agree with mr. rami in his answer

 

thanks for invite .....................waiting for more answers