The paper "The Pricing Strategies, Promotional Strategies, and Supply Chain Strategies" is a good example of a literature review on marketing. As stated there above, the marketing objectives set by Toyota Australia for its Aurion V6 include ensuring that average sales hit or reach 75,000 cars by 2014 and aiming to raise local customers by the specific percentage by the end of 2014 in terms of creating a new product. In order to achieve these specific, measurable, attainable and realistic objectives the company’ s pricing strategy must be selected to support the above objectives.
According to Kotler & Armstrong (2010) pricing strategy is an important issue in any business because it is directly related to a number of other marketing concepts such as positioning of the product in the market. Kotler and Armstrong (2010) held that the pricing of the product or service affects other elements of the marketing mix such as channel decisions, product features, and promotion. In this regard, the pricing strategy that needs to be adopted by Toyota Australia for its Aurion V6 product must be developed after the marketing strategy for Aurion V6 has been developed, decisions of the marketing mix have been made, the demand curve has been estimated, costs have been calculated and this includes both the variable and the fixed costs, environmental factors have been understood, pricing objectives have been set such as maximization of profits, maximization of revenue or stabilization of prices. From the marketing objectives stated above, it is clear that the pricing objectives of Toyota Australia towards its Aurion V6 is to maximize revenues and maximization of the quantity of the Aurion V6 vehicles sold in the Australia market by 2014.
Nagle and Holden (2002) held that the objective of the firm which seeks to maximize revenue is to maximize profits in the long-term by lowering the operation costs and increasing the share of the market commanded by the company. Nagle and Holden (2002) also noted that the objective of the firm which seeks to increase the quantity of the products it offers in the market is to decrease costs in the long-term and increase the number of the customer base. In this perspective, Toyota Australia needs to adopt a number of pricing strategies in order to achieve the above-mentioned pricing objectives.
The first pricing strategy is penetration pricing. According to Monroe (2003), penetration pricing is a pricing strategy used by the company that seeks to increase or maximize the quantity of the products or services it offers in the market. Since one of the marketing objectives that Toyota Australia seeks to meet is to increase the number of V6 cars sold in the Australia market to 75,000 by 2014 penetration pricing is, therefore, an important strategy.
Monroe (2003) observed that penetration pricing functions through the mechanism of lowering prices.