The Wendy’s Organization, as discussed in Part 1 of this paper, is relatively a strong company.
This is because of certain strengths that the company possesses as presented in the SWOT Analysis. Moreover, there are many opportunities available for the company and if they could fully utilize them, then they could compete and even win over their competitors such as McDonald’s and Burger King. However, there are certain weaknesses and threats to the company that needs their immediate attention and if not properly addressed, may lead to the further decline in their performance.Part 2 on the other hand is about the product, which is one of the 4 P’s in Marketing. Specifically, it tackled the target market, primary product categories, product-market grid, market development, and competitive advantage. It is necessary to discuss these aspects because the organization could see the aspects wherein they are not performing well, as well as the aspects that they are good at.
With this, the organization would know the features that they should enhance, and the strategies that they should retain.However, Part 3 explains the Wendy’s Organization’s difference to its competitors. For instance, it continually offers meals that are good for their consumers’ health. Aside from the said differences, Part 3 also provides the methods in which the Wendy’s Organization acquires their raw materials. They ensure that they use the materials that are of high-class. However, even though Wendy’s has these advantages, this part also cited certain things that Wendy’s should study further and one of which is taking advantage of a larger market like Asia, Mexico, etc. With this, another P in the 4 P’s of Marketing materialized, and this is place.
Lastly, Part 4 tackled the promotion part of the 4 P’s in Marketing. Some of the ways that Wendy’s is using in order to promote their products are through the internet and promotional benefits. The impacts of these promotional strategies were also discussed in this part of the paper.This part of the paper however, focuses on pricing. Pricing is the last P in the 4 P’s of Marketing. Specifically, Part 5 would discuss a description of the pricing strategies of the Wendy’s Organization; an analysis of the said pricing strategies; and whether or not Wendy’s has a competitive advantage when it comes to pricing.
Pricing Strategies and Tactics of the Wendy’s OrganizationThere exist a handful of pricing strategies. The four main pricing strategies include premium pricing, penetration pricing, economy pricing and price skimming (“Pricing Strategies”). In case of the Wendy’s Organization, they are using the price skimming strategy (see Figure 1).Price skimming is the charging of a high price in order to have a substantial competitive advantage (“Pricing Strategies”). This is very evident because as stated in the previous parts, Wendy’s is one of the first fast-food chains that offered hamburgers to the market. With this, Wendy’s had an advantage. Unfortunately, the said advantage is not sustainable.
This is because the high price tends to draw in new competitors into the market, and through the Law of Supply and Demand, the price inexorably falls due to increased supply (“Pricing Strategies”).Aside from price skimming, other minor pricing strategies that the organization is adapting include product line pricing, optional product pricing and promotional pricing. Product line pricing is the tactic where there is an array of product the pricing reveal the benefits of the component of the array (“Pricing Strategies”). For instance, the Combo Meals in Wendy’s are much cheaper that purchasing each of the food included in the said Combo Meal. On the other hand, optional product pricing is the strategy wherein the organization tries to increase the amount of customer spend once they start to purchase (“Pricing Strategies”). Usually, this is in the form of optional “extras” and this in turn raises the overall price of the product.
For example, adding an extra Caesar Salad Dressing to your order entails an additional overall charge to a customer. The last tactic that Wendy’s is using is promotional pricing. As stated in the earlier parts of the paper, promotions help the organization draw in customers. Promotional pricing promotes a product that is a very common application (“Pricing Strategies”). For instance, Wendy’s give away coupon that gives discounts to customers that has one.Analysis of the Pricing Strategies and Tactics of the Wendy’s OrganizationOverall, the pricing strategies and tactics of the Wendy’s Organization are relatively not good. This is because, as stated earlier, price skimming only gives an advantage to the company in the beginning. For instance, the prices of the burgers in Wendy’s are higher than those at McDonald’s.
What does this imply? To a common consumer, assuming that tastes and preferences is constant in all burgers, would prefer the burgers that are available in McDonald’s. Why is this so? This is because the customer perceives that he would be able to maximize the purchasing power of his money if he buys the McDonald’s burger because he gets one at a lower price. So what could Wendy’s do about this?Therefore, Wendy’s should price their prices relative to that of its competitors. This is because if the prices of all the fast-food chains were closer to one another, then the consumers would be indifferent on where to purchase their burgers. Moreover, if this trend continues, then Wendy’s would be at a further advantage because the consumers know that the Wendy’s Organization continuously supports the call for a healthier living through healthy eating. Their meals, as well as their other products reflect this healthy eating advocacy.In case of the other minor pricing strategies, it is good that they adapt the product line pricing and promotional pricing.
However, as for the optional product pricing, this turns off consumers. This is because some customers think that they are paying for something that should have been there in the first place. If there is no other way but to adapt the said tactic, then maybe the organization must consider lowering the price of such “extras.”Wendy’s Organization’s Competitive Advantage in PricingWendy’s definitely does not have a full competitive advantage when it comes to pricing. This is because most fast-food chains have lower prices compared to what Wendy’s offer.
Specific examples of the said fast-food chains include McDonald’s, Burger King, and Kentucky Fried Chicken. However, the advantage that Wendy’s could derive from its competitors is their health consciousness. As the society becomes more concerned with their health, Wendy’s entails a competitive advantage because people knew the organization for this trait. This means that although their products are relatively more expensive than other chains, because of their advocacy towards health, some people do not seem to mind if they charge higher prices compared to others.
ConclusionThe Marketing Mix model, sometimes referred to as the 4 P’s, is the tool that marketers use in order to assist them in defining their marketing strategy. Marketing managers use this method to attempt to produce the optimal response in the target market through a combination of variables in an optimal way. In addition, it is significant to understand that the 4 P’s are controllable variables. This means that frequent adjustments is possible in order to meet the needs of the target group.
(“Marketing Strategies (4ps)”)However, there is an Extended Marketing Mix (7 Ps) that managers could study in order to fully assess the status of their companies (“Extended Marketing Mix (7ps)”).In the case of this organization, this paper provides a comprehensive assessment of each of the said 4 P’s. It is also clear that each of the components of the mix is coherent to one another, which is very important. However, the existing strategies are not yet efficient and effective thus, certain suggestions were made for the improvement of Wendy’s.