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Pricing  And Marketing
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  • 1. Pricing and Marketing
    • Dr. Anil Mishra
    • [email_address]
    • 9937635059
    • Asian School of Business Management
  • 2. Following factors have to keep in mind before adopting pricing strategy
    • Demand of the product in the market
    • Customers’ perception
    • How much margin is adequate to sustain in the market
    • Image of the company in the market
    • Expenditure incurred for producing goods
    • Competition.
  • 3. Price and non price competition
    • In price competition marketer who can sell his products at the lowest cost will usually win a larger part of the market share.
    • Non price competition ensures when marketers focus on factors other than the price, such as product features, quality of the product, packaging, promotion and so on.
  • 4. Process of Price setting
    • Setting price objectives
    • Factors affecting demand determination
    • Analyzing the pricing of the competitors
    • Selection of a pricing method
    • The selection of pricing policy
  • 5. Setting pricing objective
    • Survival
    • Profit
    • Return on investment
    • Market share
    • Status quo
    • Product quality
  • 6. Factors affecting demand determination
    • Price sensitivity
    • Demand curve
    • Price elasticity of demand
  • 7. Customer are less price sensitive when
    • Product is new and innovative
    • When lack of knowledge about substitutes available
    • When it is difficult for them to compare the product
    • When expenditure on product is very little
    • When the cost incurred on the product is too little compared to the total cost of the end product
    • When partly cost is borne by another party
    • When the products are purchased as an extension of products that were purchased in the past
    • When the product is considered to be high quality
    • Product cannot store.
  • 8. Analyzing Competitors’ Pricing
    • The demand for a product in the market is influenced by the pricing strategies of the competitors.
    • The pricing policies of a company might attract a new competitor into the market or may force the existing competitors to leave the industry.
    • Competitors may react in three ways:
    • To maintain status quo i.e. not react to price changes.
    • To set equal to that of the company
    • To attack the price changes by setting their prices lower that that of the company
  • 9. Selection of pricing method
    • Mark up pricing:
    • Target return pricing:unit cost + (desired cost* invested capital)/ unit sales
    • Going rate pricing:
    • Perceived value pricing:
    • Sealed bid
    • Differentiated pricing
    • Value pricing
    • Market skimming:
  • 10. Selection of pricing policy
    • Psychological pricing
    • Influence of other marketing mix variables
    • Transfer pricing
    • Pricing impact on other parties
  • 11. Effects of Price Changes
    • Buyers Perception on the price changes:
    • They have to convince the buyers about the price changes it they want to retain their loyalty.
    • Customers are more sensitive to changes in prices of products, which they buy frequently.
    • They have to make sure about necessity of making price changes in the product.
    • Competitors reaction