Identify the three levels of packaging for the Morning High Tea.

 Primary – A tea bag in which finely ground Sativa L leaves or whole leaves which were

placed. A paper pouch which protects the tea bags and to ensure freshness.

 Secondary – Packets of 24 tea bags where the tea is packaged according to varieties.

 Tertiary – Boxes of 48 packets for the purpose of transporting the tea to customers for

sale.

Question 2

a. Discuss the two New Product Introduction pricing strategies that Herbs Man can use to
introduce the Morning High Tea nationally in Jamaica.

The two new product introduction pricing strategies Herbs Man can use to introduce

the Morning High Tea nationally in Jamaica are market skimming pricing, and market

penetration pricing.

Market skimming is charging a high initial price the customer is willing to pay

to get the highest revenue from the market. This approach is more typically employed

as a market-entry pricing for unique products with little or no competition

(Scarborough & Cornwall, 2019). With this approach, Herbs man would be able to

generate early profits, but when competition enters the market Herbs man would have

to lower its price. Even in the absence of competition, they would most likely

progressively cut prices to attract a new set of customers who were unwilling to pay the

original high price (Skripak et al, 2018).

According to Kotler & Armstrong (2017), there are three conditions that are
crucial for using this strategy:

 The costs of manufacturing less products cannot be so great that the benefit of

charging a higher price is lost.

 The quality and image of the product must match the higher price, and there must be

sufficient demand for the product at that price.

 Competing firms should not be able to simply enter the market and offer the product

as a lower price.

Market Penetration pricing strategy involves setting a low initial price with the

aim of quickly capturing the largest market share possible. Because of the vast number

of sales, it leads to cost reduction, allowing businesses to retain and lower their prices

even more (Kotler & Armstrong, 2017). This technique may provide Herbs Man with a

competitive edge and, its pricing may rise in the long run as its dominant market share

inhibits competition (Skripak et al, 2018). According to Gitman et al (2018), this

strategy requires extensive planning and therefore a marketing strategy that

incorporates mass production, promotion, and distribution is essential.

However, as with skimming, there a few conditions that are necessary for using

this strategy (Kotler & Armstrong, 2017):

 The market must be very price sensitive, with a reduced price resulting in increased

market expansion.

 As sales volume grows, the costs of production and distribution for the product must

fall.

 The company must maintain this low price which helps to keep out the competitors.