Scribd
Upload
105 views14 pages

Pricing

The document outlines a six step pricing process: 1) selecting objectives, 2) determining demand, 3) estimating costs, 4) analyzing competitors, 5) selecting a pricing method, and 6) setting the final price. It then discusses strategies for adapting prices based on location, promotions, and different customers. Specific strategies covered include geographical, promotional, and discriminatory pricing as well as new product and product mix pricing approaches.

Uploaded by

rohan_jangid8
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
105 views14 pages

Pricing

The document outlines a six step pricing process: 1) selecting objectives, 2) determining demand, 3) estimating costs, 4) analyzing competitors, 5) selecting a pricing method, and 6) setting the final price. It then discusses strategies for adapting prices based on location, promotions, and different customers. Specific strategies covered include geographical, promotional, and discriminatory pricing as well as new product and product mix pricing approaches.

Uploaded by

rohan_jangid8
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 14

Pricing Process

1. Selecting Pricing Objective


Survival Maximum Current Profit Maximum Market Share Maximum Market Skimming Product-Quality Leadership Other
Partial Cost recovery Full Cost recovery

2. Determining Demand
Price Sensitivity Estimating Demand Curve
Surveys Price experiments Statistical experiments

Price Elasticity of Demand

3. Estimating Costs
Types of Costs and Levels of Production Accumulated Production Target Costing

4. Analyzing Competitors Costs, Prices and Offers

5. Selecting a Pricing Method


Markup Pricing Target Return Pricing

Perceived Value Pricing


Value Pricing Going Rate Pricing Auction Type Pricing

6. Selecting the Final Price


Impact of Other Marketing Activities Company Pricing Policies Gain-and-Risk sharing pricing Impact of price on other parties

ADAPTING THE PRICE

Geographical Pricing
How to price a product for customers located in different parts of the world.
Higher price for distant customers Same price for all

5 strategies
1. 2. 3. 4. 5. FOB-origin pricing (free on board) Uniform-delivered pricing Zone pricing Basing-point pricing Freight-absorption pricing

Promotional Pricing
Temporary reduction on list price or even cost price.
Creates buying excitement and urgency.

Done to increase sales and reduce inventories.


Also done thru special event pricing (Boxing Day)

Adverse effects
Creating deal prone customers Eroding brand value in eyes of customer. Leading to industry price wars, usually one co. with best operations.

To be used in certain circumstances and not as a steady diet.

Discriminatory Pricing
Adjusting prices continually to meet the characteristics and needs of individual customers and situations. Based on
buying behavior Inventories, costs and demand

Buyer benefits
Product and price comparison from 1000 of vendors Negotiate prices

Drawbacks
Knowledge of discriminatory pricing is a backfire. May damage important customer relationships.

PRICING STRATEGIES

New Product Pricing Strategies


Market-Skimming Pricing

Market- Penetration Pricing

Product Mix Pricing Strategies


Product Line Pricing

Optional Feature Pricing


Captive-Product Pricing
2-part Pricing (service)

By-Product Pricing Product Bundle Pricing

You might also like