Understanding Pricing

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Marketing 6621

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Understanding Pricing

  1. 1. UNDERSTANDING PRICING
  2. 2. Amount at which a good/ser vice will be sold in a market. What is
  3. 3. PRICINGMethod used by a company to set the price for a product/ser vice. What is
  4. 4. PRICINGThroughout most of histor y prices were set by negotiation between buyers and sellers. A brief histor y of This was done through bar tering.
  5. 5. BARTERING W hat is
  6. 6. BARTERINGThe exchange of goods/services for other goods or services without using money. W hat is
  7. 7. Money/currency gave people other methods to pay for goods and services.
  8. 8. How Companies Set Their
  9. 9. Setting the RIGHT PRICEb a s e d o n v a r i o u s f a c t o r s 1. Establish pricing goals 2. Estimate demand, costs, and profits 3. Choose a price strategy 4. Fine tune with pricing tactics 5. Results lead to the right price
  10. 10. Pricing Objectives 1.Profit-oriented pricing objectives 2.Sales-oriented pricing objectives 3.Status-quo pricing objectives
  11. 11. Profit-oriented Setting prices for your products that will guarantee you'll make money on each sale. Pricing Objectives
  12. 12. Sales-oriented Setting prices for your products that will guarantee a specific level of sales volume. Pricing Objectives
  13. 13. Status-Quo Setting prices for your products that will maintain current price levels or meet the price levels of the competition. . Pricing Objectives
  14. 14. Pricing Strategy A basic, long-term pricing framework, which establishes the initial price for a product and the intended direction for price movements over the PLC. W hat is a
  15. 15. SPECIAL PRICING TACTICS
  16. 16. Single Price All goods offered at the same price to all customers
  17. 17. Flexible Price Price will vary for each customer
  18. 18. Lead Pricing Selling the product at near or below cost
  19. 19. Bait Pricing False/misleading price used to the lure customers to the product.
  20. 20. Price Bundling Combining two or more items for a single price
  21. 21. Two Part Pricing Two separate payments required for one product.

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