Based on the concept of customer value–based pricing, explain Gillette’s rise to market dominance. 1

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10-16 Based on the concept of customer value–based pricing, explain Gillette’s rise to market dominance.

Ans ) Due to its outstanding efficiency, Gillete has risen to market supremacy based on the principle of pricing based on consumer value. They continue to be creative and are always the first to introduce new razor improvements, which improves the quality of their merchandise, and because they are the first to sell these razors, they have increased these The value of the knife is based on the customer. Because consumers think they have higher value, they can set the price higher than other razor companies.

10-17 Historically, did Gillette employ good-value pricing or value-added pricing? Explain Ans ) Gillette had previously used value-added pricing technology and then decided to reduce its rate by 12%. They still keep their prices higher than the prices of most companies, and instead of releasing new cheaper products, they release more expensive products. For example, they can release a cartridge with a new blade, and then charge more for it, while reducing the price of the previous blade. They increase the value of current goods by making new goods look like the goods they want, so that they can charge higher prices

10-18 Based on those same concepts of value-based pricing, explain how Gillette’s pricing strategy stopped working.

Ans) When sales finally stabilized, Gillette's pricing policy failed. Yes, they added value, but they also continued to increase prices. In the end, it is such a point that consumers cannot see that the product has as much value as its value. Even when razors are simpler, such as when they have only one blade, there are still many things that can be done to make them more valuable. They eventually ran out of ideas and had to come up with novel solutions, such as heated razors.

Although it does add value, it does not seem to be something customers want to spend a lot of money on.

Not to mention the fact that they must contend with their competitors. They have a good reputation for delivering high-quality, reliable goods, but other companies offer the same quality at very little cost.

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10-19 What can Gillette do to improve its position in the market? Reference any material from Chapter 10.

Ans ) Gillette should also implement a high-value pricing plan to strengthen its market position. They have tried value-added methods and may have reached the point where they cannot take any other measures to add value. Other companies are beating them, offering the same quality as Gillette's products at lower prices, which is why Gillette is struggling. If they release a new product using a high-value pricing strategy, or even a brand new product line, they are likely to win consumers who leave because of the high price.

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