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  • 1. www.francisestolano.blogspot.comph.linkedin.com/in/estolanofrancis/Chapter 14: Developing Price Strategiesand ProgramsFrancis L. EstolanoMay 10, 2013How Much Are You?
  • 2. Outline:www.francisestolano.blogspot.comph.linkedin.com/in/estolanofrancis/• 6 Steps in Setting Price• Price Adaptation Strategies
  • 3. 6 Steps in Setting PriceSelect thePriceObjectiveDetermineDemandEstimateCostsAnalyzecompetitorprizeSelectPricingmethodSelect finalpricewww.francisestolano.blogspot.comph.linkedin.com/in/estolanofrancis/
  • 4. www.francisestolano.blogspot.comph.linkedin.com/in/estolanofrancis/1st Step: Selecting the Price Objective• Survival• Maximum current profit• Maximum market share• Maximum market skimming• Product-quality leadership
  • 5. www.francisestolano.blogspot.comph.linkedin.com/in/estolanofrancis/2nd Step: Determining Demand• Price Sensitivity• Estimating Demand Curves• Price Elasticity of Demand
  • 6. www.francisestolano.blogspot.comph.linkedin.com/in/estolanofrancis/3rd Step: Estimating Costs• Types of Costs• Accumulated Production• Activity-based Cost Accounting• Target Costing
  • 7. www.francisestolano.blogspot.comph.linkedin.com/in/estolanofrancis/4rd Step: Analyze Competitor Price Mix• Identify industry price• Compare with costs of product• Change pricing strategy• Stay ahead with trends in pricingstrategy through competitor
  • 8. www.francisestolano.blogspot.comph.linkedin.com/in/estolanofrancis/5th Step: Selecting Pricing Method• Mark up Pricing• Target-Return Pricing• Perceived-Value Pricing• Value Pricing• Going-rate Pricing• Auction Type Pricing
  • 9. www.francisestolano.blogspot.comph.linkedin.com/in/estolanofrancis/6th Step: Selecting the Final Price• Impact of other marketing activities• Company pricing policies• Gain and risk sharing pricing• Impact of price on other parties
  • 10. 4 Price-Adaptation Strategieswww.francisestolano.blogspot.comph.linkedin.com/in/estolanofrancis/1. Geographical Pricing2. Price Discounts and Allowances3. Promotional Pricing4. Differentiated Pricing
  • 11. Geographical Pricingwww.francisestolano.blogspot.comph.linkedin.com/in/estolanofrancis/The practice ofmodifying a basic list ofprice based ongeographical location
  • 12. Price Discounts and Allowanceswww.francisestolano.blogspot.comph.linkedin.com/in/estolanofrancis/Prices of goods orservices are beingreduced.
  • 13. Promotional Pricingwww.francisestolano.blogspot.comph.linkedin.com/in/estolanofrancis/• Loss-leader Pricing• Special Event Pricing• Cash Rebates• Low-Interest Financing• Longer Payment Terms• Warranties and Service Contracts• Psychological Discounting
  • 14. Differentiated Pricingwww.francisestolano.blogspot.comph.linkedin.com/in/estolanofrancis/• Customer Segment Pricing• Product form Pricing• Image Pricing• Channel Pricing• Location Pricing• Time Pricing• Yield Pricing
  • 15. REMEMBER THIS….www.francisestolano.blogspot.comph.linkedin.com/in/estolanofrancis/4$
  • 16. www.francisestolano.blogspot.comph.linkedin.com/in/estolanofrancis/Chapter 14: Developing Price Strategiesand ProgramsFrancis L. EstolanoMay 10, 2013How Much Are You?