Product Pricing ApEc 4451
General Retail Strategies <ul><li>EDLP (everyday low pricing): </li></ul><ul><li>- Aimed at pricing continuity. </li></ul>...
Approaches to Product Pricing <ul><li>Cost-oriented method: </li></ul><ul><li>- Also called markup pricing. </li></ul><ul>...
Profit-Oriented Methods: Used by producers <ul><li>Target Profit Pricing: price to achieve a specific profit level. </li><...
Adjustments to list (normal) price  <ul><li>Quantity discounts (multiple-unit pricing. </li></ul><ul><li>Seasonal discount...
New product pricing: consider <ul><li>Demand – potential number of consumers and elasticity of demand. </li></ul><ul><li>N...
Special Pricing Strategies <ul><li>Price bundling or Bundle pricing. </li></ul><ul><li>Variable pricing (zone pricing): ch...
Special pricing (continued) <ul><li>Prestige pricing: sets high price to attract status-conscious consumers. </li></ul><ul...
Internet Pricing <ul><li>Consumers use for price search or comparison shopping; even if don’t buy on internet. </li></ul><...
Upcoming SlideShare
Loading in …5
×

Product Pricing ApEc 4451 General Retail Strategies

491 views
443 views

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
491
On SlideShare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
19
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Product Pricing ApEc 4451 General Retail Strategies

  1. 1. Product Pricing ApEc 4451
  2. 2. General Retail Strategies <ul><li>EDLP (everyday low pricing): </li></ul><ul><li>- Aimed at pricing continuity. </li></ul><ul><li>- Strive for low price, but not always the </li></ul><ul><li>lowest. </li></ul><ul><li>- Low price guarantee policy. </li></ul><ul><li>- Trend toward. </li></ul><ul><li>High/low pricing: </li></ul><ul><li>- Maintain a regular price typically. </li></ul><ul><li>- Occasional deep-discount sales price. </li></ul><ul><li>- Trend away from; role of manufacturers. </li></ul>
  3. 3. Approaches to Product Pricing <ul><li>Cost-oriented method: </li></ul><ul><li>- Also called markup pricing. </li></ul><ul><li>- Add a fixed % markup over cost. </li></ul><ul><li>- Used by retailers: % over COGs. </li></ul><ul><li>- Is quick and simple. </li></ul><ul><li>Demand-oriented method: </li></ul><ul><li>- Based on what customers expected </li></ul><ul><li>or willing to pay. </li></ul><ul><li>- Competition-oriented pricing. </li></ul><ul><li>- Customary pricing (vending machines). </li></ul><ul><li>- Loss-leader pricing. </li></ul>
  4. 4. Profit-Oriented Methods: Used by producers <ul><li>Target Profit Pricing: price to achieve a specific profit level. </li></ul><ul><li>Target Return-on-Sales Pricing: aim is to achieve profits that are specific percentage of sales volume. </li></ul><ul><li>- Supermarkets return on sales of 1-4%. </li></ul><ul><li>Target Return-on-Investment Pricing: </li></ul><ul><li>- Companies like GM set a ROI such as </li></ul><ul><li>20%. </li></ul>
  5. 5. Adjustments to list (normal) price <ul><li>Quantity discounts (multiple-unit pricing. </li></ul><ul><li>Seasonal discounts. </li></ul><ul><li>Coupons: discount when purchased. </li></ul><ul><li>Rebates: portion of price returned to buyer. </li></ul><ul><li>Special event pricing. </li></ul>
  6. 6. New product pricing: consider <ul><li>Demand – potential number of consumers and elasticity of demand. </li></ul><ul><li>Newness of product- stage in lifecycle. </li></ul><ul><li>Cost of production and marketing. </li></ul><ul><li>Competition and its pricing. </li></ul>
  7. 7. Special Pricing Strategies <ul><li>Price bundling or Bundle pricing. </li></ul><ul><li>Variable pricing (zone pricing): charge different price in different stores, markets, or zones. </li></ul><ul><li>Skimming pricing: set a very high initial price that only a few customers will pay. </li></ul><ul><li>Penetration pricing: set a low initial price to appeal to mass market. </li></ul>
  8. 8. Special pricing (continued) <ul><li>Prestige pricing: sets high price to attract status-conscious consumers. </li></ul><ul><li>Price lining: price items in a product line at a number of different price points. </li></ul><ul><li>Odd pricing: $2.99; $495,000. </li></ul><ul><li>- Customers don’t think as $3.00 or half a million. </li></ul><ul><li>- Widely used, although may not work. </li></ul><ul><li>Demand-backward pricing: adjust quality to achieve desired price point. </li></ul>
  9. 9. Internet Pricing <ul><li>Consumers use for price search or comparison shopping; even if don’t buy on internet. </li></ul><ul><li>Auction pricing: Ebay; some companies use Ebay to sell overstocked, returned; out-of-season goods. </li></ul><ul><li>Low-bid pricing: Priceline; not sure of what purchasing (ex. Number of stops on flight or actual hotel). </li></ul><ul><li>Internet/home-delivery grocery shopping: </li></ul><ul><li>Simon Delivers – Coburn’s </li></ul>

×