SlideShare a Scribd company logo
1 of 14
Download to read offline
Pricing by Neeraj Bhandari ( Surkhet.Nepal )
 Price is an important element of the marketing mix.
It can be used as a strategic marketing variable to meet
competition.
 It is also a direct source of revenue for the firm. It must not
only cover the costs but leave some margin to generate
profit for the firm.
 Price should not be so high as to frighten the customers.
 Price is also an element which is highly perceptible to
customers and significantly affects their decisions to buy a
product.
 Price directly determines the quality to be sold.
 That is why electric fans are sold at lower prices and hotels
reduce their tariffs during off season periods to attract
customers.
Various Factors Affecting Pricing
 Pricing decisions are usually determined by
demand, competition and cost.
1. Demand: The popular ‘Law of Demand’ states that “higher
the price, lower the demand, and vice versa, other things
remaining the same”.
In season, due to plentiful supplies of certain, agricultural
products, the prices are low and because f low prices, the
demand for them increases substantially.
Of course, the law of demand assumes that there should be no
change in the other factors influencing demand except
price. If any one or more of the factors, for
instance, income, the price of the substitutes, tastes and
preferences of the
consumers, advertising, expenditures, etc. vary, the demand
may rise in spite of a rise in price, or alternatively,
the demand may fall in spite of a fall in price.
2. Competition:
 The degree of control over prices which the seller may
exercise varies widely with the competitive situation in
which they operate.
 Sellers operating under conditions of pure competition
do not have any control over the prices they receive.
 A monopolist, on the other hand, may fix prices
according to his discretion.
 Sellers operating under imperfect competition may
have some pricing discretion.
 The marketers, therefore, needs to know the degree of
pricing discretion enjoyed by him.
Who determines the price?
 Price takers (Pure Competition)- All that the individual seller
can do is to accept the price prevailing in the market, i.e., he is in
a position of a Price Taker. If he wants to change a higher
price, buyers will purchase from other sellers. And he need not
charge less since he can sell his small supply at the going market
price.
 Price makers (Monopoly)- A single producer has complete
control of the entire supply of a certain product. Railways and
Telephones are examples of monopoly.
Main features of monopoly are:
 There is only one seller of a particular good or service and
 rivalry from the producers of substitutes is so remote that it is
almost insignificant.
As a result, the monopolist is in a position to set the price
himself. Thus, he is in the position of a Price Setter.
 Oligopoly: is a market situation characterised by a few
sellers, each having an appreciable share in the total output
of the commodity.
Ex. Automobiles, cement, tyre, infant food, dry
batteries, tractors, cigarettes, aluminium and razor blades
industries.
In each of these industries, each seller knows his competitors
individually in each market.
 Monopolistic competition: is a market situation, in which
there are many sellers of a particular product, but the
product of each seller is in some way differentiated in the
minds of consumers from the product of every other seller.
Ex. You can find it out yourself by going to the market, as a
large number of consumer goods like
toothpastes, soaps, cigarettes etc. are subject to a large
degree of product differentiation as a means of attracting
Influences on Price
 Customer demand
 Competitors’ behavior/prices/actions
 Costs
 Regulatory environment – legal, political and image
related
Pricing Methods
1. Cost-Plus or Full-cost pricing
2. Pricing for a rate of return, also called target pricing
3. Marginal cost pricing
4. Going rate pricing, and
5. Customary prices
Cost-plus or Full-cost Pricing
 This is most common methods used in pricing. Under
this method, the price is set to cover costs
(materials, labour and overhead) and a predetermined
percentage for profit.
 The percentage differs strikingly among
industries, among members- firms and even among
products of the same firm.
 This may reflect differences in competitive
intensity, differences in cost base and differences in the
rate of turnover and risk.
Pricing for a rate of return (Target
pricing)
 Rate of return pricing is practiced by businesses that
set specific goals for the capital that they spend and
the revenue they wish to generate.
 A business can set prices to ensure that these goals will
be achieved.
Marginal Cost Pricing
 Both under above mentioned methods, prices are
based on total costs comprising fixed and variable
costs.
 Under marginal cost pricing, fixed costs are ignored
and prices are determined on the basis of marginal
cost.
 The firm uses only those costs that are directly
attributable to the output of a specific product.
Going-rate Pricing
 Instead of the cost the emphasis here is on the market.
 The firm adjust its own price policy to the general
pricing structure in the industry.
 Where costs are particularly difficult to measure, this
may seem to be the logical first step in a rational
pricing policy.
 Taker of this pricing strategy will show that the firm
has some power to set its own price and could be a
price maker if it chooses to face all the consequences.
Ex. Banks, Petrol, Supermarkets, Electrical goods.
Customary Pricing
 Prices of certain goods become more or less fixed, not
by deliberate action on the seller’s part but as a result
of their having prevailed for a considerable period of
time. For such goods, changes in costs are usually
reflected in changes in quality or quantity. Only when
the costs change significantly the customary prices of
these goods are changed.
 Ex. Candy bars of a certain weight all cost a predictable
amount -- unless you purchase them in an airport
shop.
Pricing Strategies
 Price skimming (Creaming) is a pricing strategy in
which a marketer sets a relatively high price for
a product or service at first, then lowers the price over
time.
 Penetration pricing is a pricing strategy where the
price of a product is initially set at a price lower than
the eventual market price, to attract new customers.

More Related Content

What's hot

4 working capital managementppt
4 working capital managementppt4 working capital managementppt
4 working capital managementpptDr. Abzal Basha
 
Business valuation
Business valuationBusiness valuation
Business valuationKhalid Aziz
 
Managerial economics ppt baba @ mba 2009
Managerial economics ppt baba  @ mba 2009Managerial economics ppt baba  @ mba 2009
Managerial economics ppt baba @ mba 2009Babasab Patil
 
3901799 transfer-pricing
3901799 transfer-pricing3901799 transfer-pricing
3901799 transfer-pricingGaurav Parmar
 
Transaction Cost Economics
Transaction Cost Economics Transaction Cost Economics
Transaction Cost Economics encoreunefois
 
Investment decision
Investment decisionInvestment decision
Investment decisionafukhan
 
Economies and Diseconomies of Scale
Economies and Diseconomies of ScaleEconomies and Diseconomies of Scale
Economies and Diseconomies of Scaletutor2u
 
Cost of capital
Cost of capitalCost of capital
Cost of capitalNirmal PR
 
Price strategy & price discrimination
Price strategy & price discriminationPrice strategy & price discrimination
Price strategy & price discriminationRutvik Patel
 
Improving Cash Flow
Improving Cash FlowImproving Cash Flow
Improving Cash Flowtutor2u
 
Investment decisions / capital Budgeting
Investment decisions / capital BudgetingInvestment decisions / capital Budgeting
Investment decisions / capital BudgetingRaghav Jha
 
Finance theory and financial strategy
Finance theory and financial strategyFinance theory and financial strategy
Finance theory and financial strategytu_admir1
 
International pricing strategy
International pricing strategyInternational pricing strategy
International pricing strategySubrata Kumar Dey
 

What's hot (20)

4 working capital managementppt
4 working capital managementppt4 working capital managementppt
4 working capital managementppt
 
Business valuation
Business valuationBusiness valuation
Business valuation
 
Cost of equity
Cost of equityCost of equity
Cost of equity
 
Managerial economics ppt baba @ mba 2009
Managerial economics ppt baba  @ mba 2009Managerial economics ppt baba  @ mba 2009
Managerial economics ppt baba @ mba 2009
 
Pricing methods
Pricing methods   Pricing methods
Pricing methods
 
3901799 transfer-pricing
3901799 transfer-pricing3901799 transfer-pricing
3901799 transfer-pricing
 
Oligopoly
OligopolyOligopoly
Oligopoly
 
Manegerial Economics
Manegerial EconomicsManegerial Economics
Manegerial Economics
 
Transaction Cost Economics
Transaction Cost Economics Transaction Cost Economics
Transaction Cost Economics
 
Investment decision
Investment decisionInvestment decision
Investment decision
 
Economies and Diseconomies of Scale
Economies and Diseconomies of ScaleEconomies and Diseconomies of Scale
Economies and Diseconomies of Scale
 
Cost of capital
Cost of capitalCost of capital
Cost of capital
 
Price strategy & price discrimination
Price strategy & price discriminationPrice strategy & price discrimination
Price strategy & price discrimination
 
Improving Cash Flow
Improving Cash FlowImproving Cash Flow
Improving Cash Flow
 
Behavioural biases
Behavioural biasesBehavioural biases
Behavioural biases
 
AGENCY PROBLEMS
AGENCY PROBLEMSAGENCY PROBLEMS
AGENCY PROBLEMS
 
Investment decisions / capital Budgeting
Investment decisions / capital BudgetingInvestment decisions / capital Budgeting
Investment decisions / capital Budgeting
 
Finance theory and financial strategy
Finance theory and financial strategyFinance theory and financial strategy
Finance theory and financial strategy
 
MANAGERIAL ECONOMICS
MANAGERIAL ECONOMICSMANAGERIAL ECONOMICS
MANAGERIAL ECONOMICS
 
International pricing strategy
International pricing strategyInternational pricing strategy
International pricing strategy
 

Similar to Pricing by Neeraj Bhandari ( Surkhet.Nepal )

PRICING DECISION
PRICING DECISIONPRICING DECISION
PRICING DECISIONamkrisha
 
Lecture 8 mba_marketing_management_-_pricing
Lecture 8 mba_marketing_management_-_pricingLecture 8 mba_marketing_management_-_pricing
Lecture 8 mba_marketing_management_-_pricingYousuffParvez
 
Pricing bookbooming
Pricing bookboomingPricing bookbooming
Pricing bookboomingbookbooming
 
Price and pricing
Price and pricingPrice and pricing
Price and pricingHumsi Singh
 
Pricing Strategy
Pricing StrategyPricing Strategy
Pricing StrategyDOST-TAPI
 
Pricing strategies1
Pricing strategies1Pricing strategies1
Pricing strategies1Hammaduddin
 
pricing theory and procedure, pricing policies and practices
pricing theory and procedure, pricing policies and practicespricing theory and procedure, pricing policies and practices
pricing theory and procedure, pricing policies and practicesupamadas
 
Pricing by Philiph Kotler
Pricing by Philiph KotlerPricing by Philiph Kotler
Pricing by Philiph KotlerFahad Aziz
 
Pricing strategies1
Pricing strategies1Pricing strategies1
Pricing strategies1Hammaduddin
 
Pricing modify final for print STARTEGY Pricing modi Pricing modi
Pricing modify final for print  STARTEGY Pricing modi Pricing modiPricing modify final for print  STARTEGY Pricing modi Pricing modi
Pricing modify final for print STARTEGY Pricing modi Pricing modiNidhi Desai
 
Mefa unit iii material(market stuructures and pricing methods)
Mefa unit iii material(market stuructures and pricing methods)Mefa unit iii material(market stuructures and pricing methods)
Mefa unit iii material(market stuructures and pricing methods)Dr. Durgaprasad Navulla
 
Bus169 Kotler Chapter 10
Bus169 Kotler Chapter 10Bus169 Kotler Chapter 10
Bus169 Kotler Chapter 10Alwyn Lau
 
Lecture 5 pricing strategies
Lecture 5 pricing strategiesLecture 5 pricing strategies
Lecture 5 pricing strategiesAshmond Ansere
 

Similar to Pricing by Neeraj Bhandari ( Surkhet.Nepal ) (20)

Oligopoly Concept
Oligopoly ConceptOligopoly Concept
Oligopoly Concept
 
PRICING DECISION
PRICING DECISIONPRICING DECISION
PRICING DECISION
 
Lecture 8 mba_marketing_management_-_pricing
Lecture 8 mba_marketing_management_-_pricingLecture 8 mba_marketing_management_-_pricing
Lecture 8 mba_marketing_management_-_pricing
 
Price
PricePrice
Price
 
Pricing bookbooming
Pricing bookboomingPricing bookbooming
Pricing bookbooming
 
Price and pricing
Price and pricingPrice and pricing
Price and pricing
 
Pricing Strategy
Pricing StrategyPricing Strategy
Pricing Strategy
 
Concept Of Microeconomic Helps In Pricing The Product
Concept Of Microeconomic Helps In Pricing The ProductConcept Of Microeconomic Helps In Pricing The Product
Concept Of Microeconomic Helps In Pricing The Product
 
17 retail pricing
17   retail pricing17   retail pricing
17 retail pricing
 
Pricing strategies1
Pricing strategies1Pricing strategies1
Pricing strategies1
 
pricing theory and procedure, pricing policies and practices
pricing theory and procedure, pricing policies and practicespricing theory and procedure, pricing policies and practices
pricing theory and procedure, pricing policies and practices
 
Pricing by Philiph Kotler
Pricing by Philiph KotlerPricing by Philiph Kotler
Pricing by Philiph Kotler
 
Pricing strategies1
Pricing strategies1Pricing strategies1
Pricing strategies1
 
Pricing modify final for print STARTEGY Pricing modi Pricing modi
Pricing modify final for print  STARTEGY Pricing modi Pricing modiPricing modify final for print  STARTEGY Pricing modi Pricing modi
Pricing modify final for print STARTEGY Pricing modi Pricing modi
 
Mm unit 3point2
Mm unit 3point2Mm unit 3point2
Mm unit 3point2
 
Mm unit 3point2
Mm unit 3point2Mm unit 3point2
Mm unit 3point2
 
Mm.12.10
Mm.12.10Mm.12.10
Mm.12.10
 
Mefa unit iii material(market stuructures and pricing methods)
Mefa unit iii material(market stuructures and pricing methods)Mefa unit iii material(market stuructures and pricing methods)
Mefa unit iii material(market stuructures and pricing methods)
 
Bus169 Kotler Chapter 10
Bus169 Kotler Chapter 10Bus169 Kotler Chapter 10
Bus169 Kotler Chapter 10
 
Lecture 5 pricing strategies
Lecture 5 pricing strategiesLecture 5 pricing strategies
Lecture 5 pricing strategies
 

More from Neeraj Bhandari

Dividend tax by Neeraj Bhandari (Surkhet, Nepal)
Dividend tax by Neeraj Bhandari (Surkhet, Nepal)Dividend tax by Neeraj Bhandari (Surkhet, Nepal)
Dividend tax by Neeraj Bhandari (Surkhet, Nepal)Neeraj Bhandari
 
Summer Internship Report Project - NIC ASIA BANK Nepal by Neeraj Bhandari (Su...
Summer Internship Report Project - NIC ASIA BANK Nepal by Neeraj Bhandari (Su...Summer Internship Report Project - NIC ASIA BANK Nepal by Neeraj Bhandari (Su...
Summer Internship Report Project - NIC ASIA BANK Nepal by Neeraj Bhandari (Su...Neeraj Bhandari
 
Introducing Nepal by Neeraj Bhandari (Surkhet Nepal)
Introducing Nepal by Neeraj Bhandari (Surkhet Nepal)Introducing Nepal by Neeraj Bhandari (Surkhet Nepal)
Introducing Nepal by Neeraj Bhandari (Surkhet Nepal)Neeraj Bhandari
 
Introducing Nepal by Neeraj Bhandari (Surkhet Nepal)
Introducing Nepal by Neeraj Bhandari (Surkhet Nepal)Introducing Nepal by Neeraj Bhandari (Surkhet Nepal)
Introducing Nepal by Neeraj Bhandari (Surkhet Nepal)Neeraj Bhandari
 
Retail Management by Neeraj Bhandari (Surkhet, Nepal)
Retail Management by Neeraj Bhandari (Surkhet, Nepal)Retail Management by Neeraj Bhandari (Surkhet, Nepal)
Retail Management by Neeraj Bhandari (Surkhet, Nepal)Neeraj Bhandari
 
Entrepreneurial Barriers and Challenges by Neeraj Bhandari (Surkhet, Nepal)
Entrepreneurial Barriers and Challenges by Neeraj Bhandari (Surkhet, Nepal)Entrepreneurial Barriers and Challenges by Neeraj Bhandari (Surkhet, Nepal)
Entrepreneurial Barriers and Challenges by Neeraj Bhandari (Surkhet, Nepal)Neeraj Bhandari
 
Introduction to Body Language by Neeraj Bhandari (Surkhet, Nepal)
Introduction to Body Language by Neeraj Bhandari (Surkhet, Nepal)Introduction to Body Language by Neeraj Bhandari (Surkhet, Nepal)
Introduction to Body Language by Neeraj Bhandari (Surkhet, Nepal)Neeraj Bhandari
 
Importance of Communication in Business by Neeraj Bhandari (Surkhet, Nepal)
Importance of Communication in Business by Neeraj Bhandari (Surkhet, Nepal)Importance of Communication in Business by Neeraj Bhandari (Surkhet, Nepal)
Importance of Communication in Business by Neeraj Bhandari (Surkhet, Nepal)Neeraj Bhandari
 
Introduction to Planning by Neeraj Bhandari (Surkhet,Nepal)
Introduction to Planning by Neeraj Bhandari (Surkhet,Nepal)Introduction to Planning by Neeraj Bhandari (Surkhet,Nepal)
Introduction to Planning by Neeraj Bhandari (Surkhet,Nepal)Neeraj Bhandari
 
Report on Nepal Telecom by Neeraj Bhandari (Surkhet, Nepal)
Report on Nepal Telecom by Neeraj Bhandari (Surkhet, Nepal)Report on Nepal Telecom by Neeraj Bhandari (Surkhet, Nepal)
Report on Nepal Telecom by Neeraj Bhandari (Surkhet, Nepal)Neeraj Bhandari
 
Project Report on Bajaj and Hero Honda by Neeraj Bhandari (Surkhet,Nepal)
Project Report on Bajaj and Hero Honda by Neeraj Bhandari (Surkhet,Nepal)Project Report on Bajaj and Hero Honda by Neeraj Bhandari (Surkhet,Nepal)
Project Report on Bajaj and Hero Honda by Neeraj Bhandari (Surkhet,Nepal)Neeraj Bhandari
 
Body Languagge by Neeraj Bhandari (Surkhet,Nepal)
Body Languagge by Neeraj Bhandari (Surkhet,Nepal)Body Languagge by Neeraj Bhandari (Surkhet,Nepal)
Body Languagge by Neeraj Bhandari (Surkhet,Nepal)Neeraj Bhandari
 
Entrepreneurial Barriers and Challenges by Neeraj Bhandari (Surkhet,Nepal)
Entrepreneurial Barriers and Challenges by Neeraj Bhandari (Surkhet,Nepal)Entrepreneurial Barriers and Challenges by Neeraj Bhandari (Surkhet,Nepal)
Entrepreneurial Barriers and Challenges by Neeraj Bhandari (Surkhet,Nepal)Neeraj Bhandari
 
Office Etiquette by Neeraj Bhandari (Surkhet,Nepal)
Office Etiquette by Neeraj Bhandari (Surkhet,Nepal)Office Etiquette by Neeraj Bhandari (Surkhet,Nepal)
Office Etiquette by Neeraj Bhandari (Surkhet,Nepal)Neeraj Bhandari
 
Business Plan by Neeraj Bhandari (Surkhet,Nepal)
Business Plan by Neeraj Bhandari (Surkhet,Nepal)Business Plan by Neeraj Bhandari (Surkhet,Nepal)
Business Plan by Neeraj Bhandari (Surkhet,Nepal)Neeraj Bhandari
 
Organizational Structure by Neeraj Bhandari (Surkhet,Nepal)
Organizational Structure by Neeraj Bhandari (Surkhet,Nepal)Organizational Structure by Neeraj Bhandari (Surkhet,Nepal)
Organizational Structure by Neeraj Bhandari (Surkhet,Nepal)Neeraj Bhandari
 
Print Marketing by Neeraj Bhandari (Surkhet,Nepal)
Print Marketing by Neeraj Bhandari (Surkhet,Nepal)Print Marketing by Neeraj Bhandari (Surkhet,Nepal)
Print Marketing by Neeraj Bhandari (Surkhet,Nepal)Neeraj Bhandari
 
Retail Management by Neeraj bhandari (Surkhet Nepal)
Retail Management by Neeraj bhandari (Surkhet Nepal)Retail Management by Neeraj bhandari (Surkhet Nepal)
Retail Management by Neeraj bhandari (Surkhet Nepal)Neeraj Bhandari
 
International Trade and Policy- Introduction by Neeraj Bhandari (Surkhet Nepal)
International Trade and Policy- Introduction by Neeraj Bhandari (Surkhet Nepal)International Trade and Policy- Introduction by Neeraj Bhandari (Surkhet Nepal)
International Trade and Policy- Introduction by Neeraj Bhandari (Surkhet Nepal)Neeraj Bhandari
 
NBFCs and Cooperative Banks by Neeraj Bhandari (Surkhet Nepal)
NBFCs and Cooperative Banks by Neeraj Bhandari (Surkhet Nepal)NBFCs and Cooperative Banks by Neeraj Bhandari (Surkhet Nepal)
NBFCs and Cooperative Banks by Neeraj Bhandari (Surkhet Nepal)Neeraj Bhandari
 

More from Neeraj Bhandari (20)

Dividend tax by Neeraj Bhandari (Surkhet, Nepal)
Dividend tax by Neeraj Bhandari (Surkhet, Nepal)Dividend tax by Neeraj Bhandari (Surkhet, Nepal)
Dividend tax by Neeraj Bhandari (Surkhet, Nepal)
 
Summer Internship Report Project - NIC ASIA BANK Nepal by Neeraj Bhandari (Su...
Summer Internship Report Project - NIC ASIA BANK Nepal by Neeraj Bhandari (Su...Summer Internship Report Project - NIC ASIA BANK Nepal by Neeraj Bhandari (Su...
Summer Internship Report Project - NIC ASIA BANK Nepal by Neeraj Bhandari (Su...
 
Introducing Nepal by Neeraj Bhandari (Surkhet Nepal)
Introducing Nepal by Neeraj Bhandari (Surkhet Nepal)Introducing Nepal by Neeraj Bhandari (Surkhet Nepal)
Introducing Nepal by Neeraj Bhandari (Surkhet Nepal)
 
Introducing Nepal by Neeraj Bhandari (Surkhet Nepal)
Introducing Nepal by Neeraj Bhandari (Surkhet Nepal)Introducing Nepal by Neeraj Bhandari (Surkhet Nepal)
Introducing Nepal by Neeraj Bhandari (Surkhet Nepal)
 
Retail Management by Neeraj Bhandari (Surkhet, Nepal)
Retail Management by Neeraj Bhandari (Surkhet, Nepal)Retail Management by Neeraj Bhandari (Surkhet, Nepal)
Retail Management by Neeraj Bhandari (Surkhet, Nepal)
 
Entrepreneurial Barriers and Challenges by Neeraj Bhandari (Surkhet, Nepal)
Entrepreneurial Barriers and Challenges by Neeraj Bhandari (Surkhet, Nepal)Entrepreneurial Barriers and Challenges by Neeraj Bhandari (Surkhet, Nepal)
Entrepreneurial Barriers and Challenges by Neeraj Bhandari (Surkhet, Nepal)
 
Introduction to Body Language by Neeraj Bhandari (Surkhet, Nepal)
Introduction to Body Language by Neeraj Bhandari (Surkhet, Nepal)Introduction to Body Language by Neeraj Bhandari (Surkhet, Nepal)
Introduction to Body Language by Neeraj Bhandari (Surkhet, Nepal)
 
Importance of Communication in Business by Neeraj Bhandari (Surkhet, Nepal)
Importance of Communication in Business by Neeraj Bhandari (Surkhet, Nepal)Importance of Communication in Business by Neeraj Bhandari (Surkhet, Nepal)
Importance of Communication in Business by Neeraj Bhandari (Surkhet, Nepal)
 
Introduction to Planning by Neeraj Bhandari (Surkhet,Nepal)
Introduction to Planning by Neeraj Bhandari (Surkhet,Nepal)Introduction to Planning by Neeraj Bhandari (Surkhet,Nepal)
Introduction to Planning by Neeraj Bhandari (Surkhet,Nepal)
 
Report on Nepal Telecom by Neeraj Bhandari (Surkhet, Nepal)
Report on Nepal Telecom by Neeraj Bhandari (Surkhet, Nepal)Report on Nepal Telecom by Neeraj Bhandari (Surkhet, Nepal)
Report on Nepal Telecom by Neeraj Bhandari (Surkhet, Nepal)
 
Project Report on Bajaj and Hero Honda by Neeraj Bhandari (Surkhet,Nepal)
Project Report on Bajaj and Hero Honda by Neeraj Bhandari (Surkhet,Nepal)Project Report on Bajaj and Hero Honda by Neeraj Bhandari (Surkhet,Nepal)
Project Report on Bajaj and Hero Honda by Neeraj Bhandari (Surkhet,Nepal)
 
Body Languagge by Neeraj Bhandari (Surkhet,Nepal)
Body Languagge by Neeraj Bhandari (Surkhet,Nepal)Body Languagge by Neeraj Bhandari (Surkhet,Nepal)
Body Languagge by Neeraj Bhandari (Surkhet,Nepal)
 
Entrepreneurial Barriers and Challenges by Neeraj Bhandari (Surkhet,Nepal)
Entrepreneurial Barriers and Challenges by Neeraj Bhandari (Surkhet,Nepal)Entrepreneurial Barriers and Challenges by Neeraj Bhandari (Surkhet,Nepal)
Entrepreneurial Barriers and Challenges by Neeraj Bhandari (Surkhet,Nepal)
 
Office Etiquette by Neeraj Bhandari (Surkhet,Nepal)
Office Etiquette by Neeraj Bhandari (Surkhet,Nepal)Office Etiquette by Neeraj Bhandari (Surkhet,Nepal)
Office Etiquette by Neeraj Bhandari (Surkhet,Nepal)
 
Business Plan by Neeraj Bhandari (Surkhet,Nepal)
Business Plan by Neeraj Bhandari (Surkhet,Nepal)Business Plan by Neeraj Bhandari (Surkhet,Nepal)
Business Plan by Neeraj Bhandari (Surkhet,Nepal)
 
Organizational Structure by Neeraj Bhandari (Surkhet,Nepal)
Organizational Structure by Neeraj Bhandari (Surkhet,Nepal)Organizational Structure by Neeraj Bhandari (Surkhet,Nepal)
Organizational Structure by Neeraj Bhandari (Surkhet,Nepal)
 
Print Marketing by Neeraj Bhandari (Surkhet,Nepal)
Print Marketing by Neeraj Bhandari (Surkhet,Nepal)Print Marketing by Neeraj Bhandari (Surkhet,Nepal)
Print Marketing by Neeraj Bhandari (Surkhet,Nepal)
 
Retail Management by Neeraj bhandari (Surkhet Nepal)
Retail Management by Neeraj bhandari (Surkhet Nepal)Retail Management by Neeraj bhandari (Surkhet Nepal)
Retail Management by Neeraj bhandari (Surkhet Nepal)
 
International Trade and Policy- Introduction by Neeraj Bhandari (Surkhet Nepal)
International Trade and Policy- Introduction by Neeraj Bhandari (Surkhet Nepal)International Trade and Policy- Introduction by Neeraj Bhandari (Surkhet Nepal)
International Trade and Policy- Introduction by Neeraj Bhandari (Surkhet Nepal)
 
NBFCs and Cooperative Banks by Neeraj Bhandari (Surkhet Nepal)
NBFCs and Cooperative Banks by Neeraj Bhandari (Surkhet Nepal)NBFCs and Cooperative Banks by Neeraj Bhandari (Surkhet Nepal)
NBFCs and Cooperative Banks by Neeraj Bhandari (Surkhet Nepal)
 

Recently uploaded

Key Trends and Insights for Content Marketing in 2024
Key Trends and Insights for Content Marketing in 2024Key Trends and Insights for Content Marketing in 2024
Key Trends and Insights for Content Marketing in 2024Jomer Gregorio
 
WHY E-COMMERCE BRANDS MUST PAY MORE ATTENTION TO THE GOOGLE KNOWLEDGE GRAPH
WHY E-COMMERCE BRANDS MUST PAY MORE ATTENTION TO THE GOOGLE KNOWLEDGE GRAPHWHY E-COMMERCE BRANDS MUST PAY MORE ATTENTION TO THE GOOGLE KNOWLEDGE GRAPH
WHY E-COMMERCE BRANDS MUST PAY MORE ATTENTION TO THE GOOGLE KNOWLEDGE GRAPHSara Moccand-Sayegh
 
Human vs AI Quality Raters for Search Engines.pdf
Human vs AI Quality Raters for Search Engines.pdfHuman vs AI Quality Raters for Search Engines.pdf
Human vs AI Quality Raters for Search Engines.pdfDawn Anderson MSc DigM
 
Understanding Fasting in Islam Rules, Reason, and Types.pptx
Understanding Fasting in Islam Rules, Reason, and Types.pptxUnderstanding Fasting in Islam Rules, Reason, and Types.pptx
Understanding Fasting in Islam Rules, Reason, and Types.pptxelizabethella096
 
TOP 10 POWERFULL STRATEGIES OF SOCIAL MEDIA MARKETING IN UAE
TOP 10 POWERFULL STRATEGIES OF SOCIAL MEDIA MARKETING IN UAETOP 10 POWERFULL STRATEGIES OF SOCIAL MEDIA MARKETING IN UAE
TOP 10 POWERFULL STRATEGIES OF SOCIAL MEDIA MARKETING IN UAEasiyahanif9977
 
Make your seo optimization game us to see the level of professionals with sof...
Make your seo optimization game us to see the level of professionals with sof...Make your seo optimization game us to see the level of professionals with sof...
Make your seo optimization game us to see the level of professionals with sof...SoftrickSolutions
 
Belgian Salesforce Marketing Cloud SF Office Event
Belgian Salesforce Marketing Cloud SF Office EventBelgian Salesforce Marketing Cloud SF Office Event
Belgian Salesforce Marketing Cloud SF Office Eventivanrazine1
 
SEO - Keyword Research Prompt Strategy -Marianna Nakou
SEO - Keyword Research Prompt Strategy -Marianna NakouSEO - Keyword Research Prompt Strategy -Marianna Nakou
SEO - Keyword Research Prompt Strategy -Marianna NakouMarianna Nakou
 
Promotion of business Online .ppt
Promotion of business Online        .pptPromotion of business Online        .ppt
Promotion of business Online .pptbharathithangavelu
 
Winning In House SEO Battles - by Ash Nallawalla
Winning In House SEO Battles - by Ash NallawallaWinning In House SEO Battles - by Ash Nallawalla
Winning In House SEO Battles - by Ash NallawallaAsh Nallawalla
 
How to Use AI & Make for Self-Reported Attribution in HubSpot
How to Use AI & Make for Self-Reported Attribution in HubSpotHow to Use AI & Make for Self-Reported Attribution in HubSpot
How to Use AI & Make for Self-Reported Attribution in HubSpotDimosMichailidis1
 
youth bundle Reawakening of life energy
youth bundle Reawakening of life  energyyouth bundle Reawakening of life  energy
youth bundle Reawakening of life energyquruxshamso21
 
How Sales Team Use AI to Close More Deals
How Sales Team Use AI to Close More DealsHow Sales Team Use AI to Close More Deals
How Sales Team Use AI to Close More DealsVbout.com
 
Christopher Stjean MarketSummary.pdf MMB
Christopher Stjean MarketSummary.pdf MMBChristopher Stjean MarketSummary.pdf MMB
Christopher Stjean MarketSummary.pdf MMBchristopherstjean94
 
TAM AdEx report - Print Advertising 2023
TAM AdEx report - Print Advertising 2023TAM AdEx report - Print Advertising 2023
TAM AdEx report - Print Advertising 2023Social Samosa
 
How to Analyze and Improve Your PPC Advertisements.pdf
How to Analyze and Improve Your PPC Advertisements.pdfHow to Analyze and Improve Your PPC Advertisements.pdf
How to Analyze and Improve Your PPC Advertisements.pdfBanyanbrain
 
BLOOM_February2024. Balmer Lawrie Online Monthly Bulletin
BLOOM_February2024. Balmer Lawrie Online Monthly BulletinBLOOM_February2024. Balmer Lawrie Online Monthly Bulletin
BLOOM_February2024. Balmer Lawrie Online Monthly BulletinBalmerLawrie
 
9 Major Google Updates From 2023 & 2024 SEO Predictions
9 Major Google Updates From 2023 & 2024 SEO Predictions9 Major Google Updates From 2023 & 2024 SEO Predictions
9 Major Google Updates From 2023 & 2024 SEO PredictionsSearch Engine Journal
 
india's no 1 Digital Marketing Company.pptx
india's no 1 Digital Marketing Company.pptxindia's no 1 Digital Marketing Company.pptx
india's no 1 Digital Marketing Company.pptxpaperboattechsolutio
 

Recently uploaded (20)

Key Trends and Insights for Content Marketing in 2024
Key Trends and Insights for Content Marketing in 2024Key Trends and Insights for Content Marketing in 2024
Key Trends and Insights for Content Marketing in 2024
 
WHY E-COMMERCE BRANDS MUST PAY MORE ATTENTION TO THE GOOGLE KNOWLEDGE GRAPH
WHY E-COMMERCE BRANDS MUST PAY MORE ATTENTION TO THE GOOGLE KNOWLEDGE GRAPHWHY E-COMMERCE BRANDS MUST PAY MORE ATTENTION TO THE GOOGLE KNOWLEDGE GRAPH
WHY E-COMMERCE BRANDS MUST PAY MORE ATTENTION TO THE GOOGLE KNOWLEDGE GRAPH
 
Reliv Opportunity Slides US
Reliv Opportunity Slides USReliv Opportunity Slides US
Reliv Opportunity Slides US
 
Human vs AI Quality Raters for Search Engines.pdf
Human vs AI Quality Raters for Search Engines.pdfHuman vs AI Quality Raters for Search Engines.pdf
Human vs AI Quality Raters for Search Engines.pdf
 
Understanding Fasting in Islam Rules, Reason, and Types.pptx
Understanding Fasting in Islam Rules, Reason, and Types.pptxUnderstanding Fasting in Islam Rules, Reason, and Types.pptx
Understanding Fasting in Islam Rules, Reason, and Types.pptx
 
TOP 10 POWERFULL STRATEGIES OF SOCIAL MEDIA MARKETING IN UAE
TOP 10 POWERFULL STRATEGIES OF SOCIAL MEDIA MARKETING IN UAETOP 10 POWERFULL STRATEGIES OF SOCIAL MEDIA MARKETING IN UAE
TOP 10 POWERFULL STRATEGIES OF SOCIAL MEDIA MARKETING IN UAE
 
Make your seo optimization game us to see the level of professionals with sof...
Make your seo optimization game us to see the level of professionals with sof...Make your seo optimization game us to see the level of professionals with sof...
Make your seo optimization game us to see the level of professionals with sof...
 
Belgian Salesforce Marketing Cloud SF Office Event
Belgian Salesforce Marketing Cloud SF Office EventBelgian Salesforce Marketing Cloud SF Office Event
Belgian Salesforce Marketing Cloud SF Office Event
 
SEO - Keyword Research Prompt Strategy -Marianna Nakou
SEO - Keyword Research Prompt Strategy -Marianna NakouSEO - Keyword Research Prompt Strategy -Marianna Nakou
SEO - Keyword Research Prompt Strategy -Marianna Nakou
 
Promotion of business Online .ppt
Promotion of business Online        .pptPromotion of business Online        .ppt
Promotion of business Online .ppt
 
Winning In House SEO Battles - by Ash Nallawalla
Winning In House SEO Battles - by Ash NallawallaWinning In House SEO Battles - by Ash Nallawalla
Winning In House SEO Battles - by Ash Nallawalla
 
How to Use AI & Make for Self-Reported Attribution in HubSpot
How to Use AI & Make for Self-Reported Attribution in HubSpotHow to Use AI & Make for Self-Reported Attribution in HubSpot
How to Use AI & Make for Self-Reported Attribution in HubSpot
 
youth bundle Reawakening of life energy
youth bundle Reawakening of life  energyyouth bundle Reawakening of life  energy
youth bundle Reawakening of life energy
 
How Sales Team Use AI to Close More Deals
How Sales Team Use AI to Close More DealsHow Sales Team Use AI to Close More Deals
How Sales Team Use AI to Close More Deals
 
Christopher Stjean MarketSummary.pdf MMB
Christopher Stjean MarketSummary.pdf MMBChristopher Stjean MarketSummary.pdf MMB
Christopher Stjean MarketSummary.pdf MMB
 
TAM AdEx report - Print Advertising 2023
TAM AdEx report - Print Advertising 2023TAM AdEx report - Print Advertising 2023
TAM AdEx report - Print Advertising 2023
 
How to Analyze and Improve Your PPC Advertisements.pdf
How to Analyze and Improve Your PPC Advertisements.pdfHow to Analyze and Improve Your PPC Advertisements.pdf
How to Analyze and Improve Your PPC Advertisements.pdf
 
BLOOM_February2024. Balmer Lawrie Online Monthly Bulletin
BLOOM_February2024. Balmer Lawrie Online Monthly BulletinBLOOM_February2024. Balmer Lawrie Online Monthly Bulletin
BLOOM_February2024. Balmer Lawrie Online Monthly Bulletin
 
9 Major Google Updates From 2023 & 2024 SEO Predictions
9 Major Google Updates From 2023 & 2024 SEO Predictions9 Major Google Updates From 2023 & 2024 SEO Predictions
9 Major Google Updates From 2023 & 2024 SEO Predictions
 
india's no 1 Digital Marketing Company.pptx
india's no 1 Digital Marketing Company.pptxindia's no 1 Digital Marketing Company.pptx
india's no 1 Digital Marketing Company.pptx
 

Pricing by Neeraj Bhandari ( Surkhet.Nepal )

  • 2.  Price is an important element of the marketing mix. It can be used as a strategic marketing variable to meet competition.  It is also a direct source of revenue for the firm. It must not only cover the costs but leave some margin to generate profit for the firm.  Price should not be so high as to frighten the customers.  Price is also an element which is highly perceptible to customers and significantly affects their decisions to buy a product.  Price directly determines the quality to be sold.  That is why electric fans are sold at lower prices and hotels reduce their tariffs during off season periods to attract customers.
  • 3. Various Factors Affecting Pricing  Pricing decisions are usually determined by demand, competition and cost. 1. Demand: The popular ‘Law of Demand’ states that “higher the price, lower the demand, and vice versa, other things remaining the same”. In season, due to plentiful supplies of certain, agricultural products, the prices are low and because f low prices, the demand for them increases substantially. Of course, the law of demand assumes that there should be no change in the other factors influencing demand except price. If any one or more of the factors, for instance, income, the price of the substitutes, tastes and preferences of the consumers, advertising, expenditures, etc. vary, the demand may rise in spite of a rise in price, or alternatively,
  • 4. the demand may fall in spite of a fall in price. 2. Competition:  The degree of control over prices which the seller may exercise varies widely with the competitive situation in which they operate.  Sellers operating under conditions of pure competition do not have any control over the prices they receive.  A monopolist, on the other hand, may fix prices according to his discretion.  Sellers operating under imperfect competition may have some pricing discretion.  The marketers, therefore, needs to know the degree of pricing discretion enjoyed by him.
  • 5. Who determines the price?  Price takers (Pure Competition)- All that the individual seller can do is to accept the price prevailing in the market, i.e., he is in a position of a Price Taker. If he wants to change a higher price, buyers will purchase from other sellers. And he need not charge less since he can sell his small supply at the going market price.  Price makers (Monopoly)- A single producer has complete control of the entire supply of a certain product. Railways and Telephones are examples of monopoly. Main features of monopoly are:  There is only one seller of a particular good or service and  rivalry from the producers of substitutes is so remote that it is almost insignificant. As a result, the monopolist is in a position to set the price himself. Thus, he is in the position of a Price Setter.
  • 6.  Oligopoly: is a market situation characterised by a few sellers, each having an appreciable share in the total output of the commodity. Ex. Automobiles, cement, tyre, infant food, dry batteries, tractors, cigarettes, aluminium and razor blades industries. In each of these industries, each seller knows his competitors individually in each market.  Monopolistic competition: is a market situation, in which there are many sellers of a particular product, but the product of each seller is in some way differentiated in the minds of consumers from the product of every other seller. Ex. You can find it out yourself by going to the market, as a large number of consumer goods like toothpastes, soaps, cigarettes etc. are subject to a large degree of product differentiation as a means of attracting
  • 7. Influences on Price  Customer demand  Competitors’ behavior/prices/actions  Costs  Regulatory environment – legal, political and image related
  • 8. Pricing Methods 1. Cost-Plus or Full-cost pricing 2. Pricing for a rate of return, also called target pricing 3. Marginal cost pricing 4. Going rate pricing, and 5. Customary prices
  • 9. Cost-plus or Full-cost Pricing  This is most common methods used in pricing. Under this method, the price is set to cover costs (materials, labour and overhead) and a predetermined percentage for profit.  The percentage differs strikingly among industries, among members- firms and even among products of the same firm.  This may reflect differences in competitive intensity, differences in cost base and differences in the rate of turnover and risk.
  • 10. Pricing for a rate of return (Target pricing)  Rate of return pricing is practiced by businesses that set specific goals for the capital that they spend and the revenue they wish to generate.  A business can set prices to ensure that these goals will be achieved.
  • 11. Marginal Cost Pricing  Both under above mentioned methods, prices are based on total costs comprising fixed and variable costs.  Under marginal cost pricing, fixed costs are ignored and prices are determined on the basis of marginal cost.  The firm uses only those costs that are directly attributable to the output of a specific product.
  • 12. Going-rate Pricing  Instead of the cost the emphasis here is on the market.  The firm adjust its own price policy to the general pricing structure in the industry.  Where costs are particularly difficult to measure, this may seem to be the logical first step in a rational pricing policy.  Taker of this pricing strategy will show that the firm has some power to set its own price and could be a price maker if it chooses to face all the consequences. Ex. Banks, Petrol, Supermarkets, Electrical goods.
  • 13. Customary Pricing  Prices of certain goods become more or less fixed, not by deliberate action on the seller’s part but as a result of their having prevailed for a considerable period of time. For such goods, changes in costs are usually reflected in changes in quality or quantity. Only when the costs change significantly the customary prices of these goods are changed.  Ex. Candy bars of a certain weight all cost a predictable amount -- unless you purchase them in an airport shop.
  • 14. Pricing Strategies  Price skimming (Creaming) is a pricing strategy in which a marketer sets a relatively high price for a product or service at first, then lowers the price over time.  Penetration pricing is a pricing strategy where the price of a product is initially set at a price lower than the eventual market price, to attract new customers.