PRINCIPLES OF MARKETING   Pricing
priceis theamount ofmoneycharge
price is thesum of allvalues thatconsumers
Factors to consider w
perceptions of  the product’s  value set    ceiling for
Product costs set thefloor for prices
perceptionsof value
Value-based pricing uses   buyers’perceptions ofvalue, not the
Cost-based pricing   involves setting   prices based on       costs ofproducing, distributi  ng and selling the product pl...
setting high         prices to          “skim”       revenues layer        by layer from         the market.Market-skimmin...
The product’sThe costs of producing  quality and  a smaller volume  image mustcannot be so high thatshould          Compet...
set a low initial          price in order         to penetrate the              market         quickly and           deepl...
Production and must help       The low price       The market must bedistribution costs       keep out the competition    ...
Product lin
Combining several products and offering    the bundle at a reduced price    Product-bundle
“Whencustomerscannotjudgequality,   pr
Initiating price cuSituations may maya  A company lead  The to consider   firm firm mayalso cut prices in acutting prices ...
Initiating price incMaking low-visibility price       moves first                  Factors in price                  incre...
Thanks fr           Improve                      quality LIsteningReduce     Raise                Launch low-            ...
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Marketing

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  • Now I’d like to talk about Price adjustment strategyCompanies usually adjust their basic prices to account for various customer differences and changing situationFirst of all, discount and allowance. There are a couple of kinds of discounts included in this adjustment Cash discount: Which means that a buyer pay their bills before due might be deducted a certain % of bills The purpose of this kind is to reduce bad debts and credit-collection costs
  • Also being included in Discount and Allowance is QUANTITY DISCOUNT: Which simply means if the buyers purchase products or services in large volume, the price for this bulk will be discounted => The target of this act is to encourage buyers to buy more, and reduce the possibility of overstocking
  • The next sort of discount is TRADE DISCOUNTFor example, retail price of an item is reduced when sold to a reseller
  • Last but not least, SEASONAL DISCOUNT Currently we are in autumn, there are not many people purchase christmas decorating products, so if we purchase them now, we possibly be discounted a certain amount of cash
  • The second kind of price-adjustment strategy is “SEGMENTED PRICING”
  • The first item is customer-segmentedA good example for this is Let’s say, many teenagers in Britain pay for their cell phone services on a pre-paid basis, which is more expensive than the tariff for a monthly contract
  • Let’s move on product-form pricingA 1-litre bottle of Evian mineral water may cost 1.5 pound at local supermarketBut a 50 ml aerosol can of Evian sells for Spas or beauty bontique may be priced at over 5 pound
  • Time is moving on, so let’s turn to the third area of Segmented PRICING: Location pricingLet me give you an example, if you plan to study abroad in the US, you may not be surprised that state students are charged lower tuition fees than you, because you are non-state students.
  • The final area in segmented pricing is TIME PRICINGTelephone companies offer lower “off-peak” chargesElectricity costs less at night
  • Many customers use price to judge quality, they simply compare price between 2 products. Psychologically, the product which has price higher will be better.Price may tell you something about this productA cheapest app on App store is priced $0.99 but not 1. because psychologically, we normally pay attention to the first digit, which is nearer to 0 than 1
  • Marketing

    1. 1. PRINCIPLES OF MARKETING Pricing
    2. 2. priceis theamount ofmoneycharge
    3. 3. price is thesum of allvalues thatconsumers
    4. 4. Factors to consider w
    5. 5. perceptions of the product’s value set ceiling for
    6. 6. Product costs set thefloor for prices
    7. 7. perceptionsof value
    8. 8. Value-based pricing uses buyers’perceptions ofvalue, not the
    9. 9. Cost-based pricing involves setting prices based on costs ofproducing, distributi ng and selling the product plus a fair
    10. 10. setting high prices to “skim” revenues layer by layer from the market.Market-skimming pricing
    11. 11. The product’sThe costs of producing quality and a smaller volume image mustcannot be so high thatshould Competitors Buyers are not price- support its they cancel the andenter not be able to a sensitive higher price the market easily of sufficient number andadvantage of charging undercut the high more them must want the price product at that price
    12. 12. set a low initial price in order to penetrate the market quickly and deeplyMarket-Penetration pricing
    13. 13. Production and must help The low price The market must bedistribution costs keep out the competition highly price- and the penetration pricermust fall as sales must maintain so low-price sensitive, its that avolume increases position – otherwise the low price produces price advantage may be more market growth only temporary
    14. 14. Product lin
    15. 15. Combining several products and offering the bundle at a reduced price Product-bundle
    16. 16. “Whencustomerscannotjudgequality, pr
    17. 17. Initiating price cuSituations may maya A company lead The to consider firm firm mayalso cut prices in acutting prices to its price such drive to dominate cut as excess the marketboost sales and capacity, falling demand orlower through falling share. costs. market share,…
    18. 18. Initiating price incMaking low-visibility price moves first Factors in price increases: cost inflation, over- demand
    19. 19. Thanks fr Improve quality LIsteningReduce Raise Launch low- price perceived and Price quality increase "fighting brand" price

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