Understanding Pricing
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Understanding Pricing

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Marketing 6621

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Understanding Pricing Understanding Pricing Presentation Transcript

  • UNDERSTANDING PRICING
  • Amount at which a good/ser vice will be sold in a market. What is
  • PRICINGMethod used by a company to set the price for a product/ser vice. What is
  • 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.
  • BARTERING W hat is
  • BARTERINGThe exchange of goods/services for other goods or services without using money. W hat is
  • Money/currency gave people other methods to pay for goods and services.
  • How Companies Set Their
  • 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
  • Pricing Objectives 1.Profit-oriented pricing objectives 2.Sales-oriented pricing objectives 3.Status-quo pricing objectives
  • Profit-oriented Setting prices for your products that will guarantee you'll make money on each sale. Pricing Objectives
  • Sales-oriented Setting prices for your products that will guarantee a specific level of sales volume. Pricing Objectives
  • Status-Quo Setting prices for your products that will maintain current price levels or meet the price levels of the competition. . Pricing Objectives
  • 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
  • SPECIAL PRICING TACTICS
  • Single Price All goods offered at the same price to all customers
  • Flexible Price Price will vary for each customer
  • Lead Pricing Selling the product at near or below cost
  • Bait Pricing False/misleading price used to the lure customers to the product.
  • Price Bundling Combining two or more items for a single price
  • Two Part Pricing Two separate payments required for one product.