Pricing and value negotiation

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Pricing details used in Marketing procedures

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Pricing and value negotiation

  1. 1. <ul><li>Principles of Pricing </li></ul><ul><li>Fixed margin oriented Pricing. </li></ul><ul><li>Minimum margin oriented Pricing. </li></ul><ul><li>Reducing margin = reducing cost Pricing(10-15%) </li></ul><ul><li>Avoid Under Pricing. </li></ul><ul><li>Overall pricing against individual Pricing. </li></ul>
  2. 2. <ul><li>1 </li></ul><ul><li>Demand Factor </li></ul><ul><li>Elasticity of Demand. </li></ul><ul><li>Cross Elasticity </li></ul><ul><li>Customer Value perceptions. </li></ul><ul><li>2 </li></ul><ul><li>Strategy Issue </li></ul><ul><li>Target Market Selection </li></ul><ul><li>Product Positioning </li></ul><ul><li>Price Objective </li></ul><ul><li>Marketing program </li></ul>
  3. 3. <ul><li>3 </li></ul><ul><li>Structure of Competition. </li></ul><ul><li>Entry barriers. </li></ul><ul><li>Rival strategy. </li></ul><ul><li>4 </li></ul><ul><li>Strategy Issue </li></ul><ul><li>Target Market Selection </li></ul><ul><li>Product Positioning </li></ul><ul><li>Price Objective </li></ul><ul><li>Marketing program </li></ul>
  4. 4. <ul><li>5 </li></ul><ul><li>Trade Factor </li></ul><ul><li>Power in the channel </li></ul><ul><li>Traditions and Roles. </li></ul><ul><li>Margins. </li></ul><ul><li>6 </li></ul><ul><li>Legal factors </li></ul><ul><li>Vertical restriction. </li></ul><ul><li>Price discrimination </li></ul>
  5. 5. Evaluation and formation of Pricing Policy. AND Decide the price.
  6. 6. <ul><li>Increase profitability by X % over the next period/years. </li></ul><ul><li>To get foothold in the market. </li></ul><ul><li>Invite competitors to accept as market leader in the chosen segment or as corporate. </li></ul><ul><li>Increase marker share to X %. </li></ul><ul><li>Regularize the consistent purchase. </li></ul><ul><li>Restore the order in volatile market situations. </li></ul><ul><li>Reduce inventory without damaging the brand image at trade relations. </li></ul>
  7. 7. <ul><li>Pricing in monopoly trade situation </li></ul><ul><li>Pricing in Demand and supply situation </li></ul><ul><li>Pricing at dramatic and discontinuous situation. </li></ul><ul><li>Pricing at break even situation </li></ul><ul><li>Pricing in Vertical restriction/Territorial/Location/Customer restriction. </li></ul><ul><li>Pricing at Push and Pull situation </li></ul><ul><li>Pricing at Bidding and Negotiation </li></ul><ul><li>Pricing at Global pricing contracts </li></ul>
  8. 8. <ul><li>The products or services are in significant demand. </li></ul><ul><li>Local market is reasonably homogeneous. </li></ul><ul><li>Customer Top management is committed. </li></ul><ul><li>Customer seeks value enhancement more than cost cutting. </li></ul><ul><li>Supplier has good working relationship not at Head Quarters but with the respective country managers. </li></ul><ul><li>Customer and supplier have some implementation experiences with global strategy played out at local levels. </li></ul>

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