Pricing Strategies Stuart Cellars

Pricing strategies Stuart Cellars appear to be following:

• Market-skimming pricing:

Market-skimming pricing is a strategy with high initial prices to “skim” revenue layers from the market

• Product quality and image must support the price: Stuart Cellars represents “the top 10-15 percent of the wine chasing public”
• Buyers must want the product at the price: targeting the “upper end of wine connoisseurs, people who can afford a premium product at a premium price”
• Costs of producing the product in small volume should not cancel the advantage of higher prices
• Competitors should not be able to enter the market easily: consumers read and follow wine reviews

• Product-line pricing:

Product line pricing takes into account the cost differences between products in the line, customer evaluation of their features, and competitors’ prices: retail prices range from $13 per bottle to $46 per bottle based on the type of wine

• Optional product pricing:

Optional product pricing takes into account optional or accessory products along with the main product: for member of Stuart Cellars Wine Club: 20 percent discount and receive additional benefits such as complimentary tasting at the winery, additional discounts and quantity discount.

Key factors:

• Quality of the product: Target customers are ones who read wine reviews, so Stuart Cellars need to keep the quality of their wine as good as it can be to make customers satisfy and feel that the price deserves the goods they purchase.
• Price: The price has to be not too low to make the customers doubt about the quality of the product and not too high when comparing to competitors.