Developing pricing strategy and programs_chapter_13 of book "A south Asian perspective: Marketing Management" by Philip kotler, Kevin Lane keller, Abraham koshy, and Mithileshwar jha.

1. DEVELOPING PRICING STRATEGY AND PROGRAMS
Part 2

4. 1

5. 5MAJOR OBJECTIVES ARE
Survival Max. Profit Max. Market Share
Max. Market Skimming Product Quality Leadership

6. 2

7. PRICE
Demand

8. Price Sensitivity
Price elasticity of demand
Estimation Demand curve

9. 3

10. Demand sets a ceiling
on the price
the company can charge for its product
where costs set the floor
Companies charge
a price that will at least cover
all production costs

11. Type of costs
and
level of production
Variable cost
Fixed cost
Total cost
Average cost
Rent, Bills Electricity, Salaries
Based on units Produced
Sum of all costs
Cost per unit of production

12. Accumulation Product
Target Costing
Higher the production
lower the per unit cost
Costs change with production
Scale and experience,
Bring down costs
so that cost remain in target range

13. 4

14. If the firm’s offer contains features
not offered by the nearest competitor,
firm should evaluate their worth
to the customer and
add that to competitor’s price
If the competitor’s offer contains some features
not offered by the firm,
the firm should subtract their value
from its own price

15. 5

16. Markup Pricing
Target Return Pricing
the firm determines the price that yield its
target rate of return on investment
Add a standard markup to the
product’s cost for profit

17. Perceived Value Pricing
Value Pricing
on customer’s perceived value i.e. product
performance, Warranty quality, customer
support, trust and esteem
Charging a fairly low price for a high quality
product by inventing and reengineering low cost
products without affecting quality

18. Going Rate Pricing
Auction type pricing
Specially on online servicers

19. 6

20. Impact of other marketing activities
Company pricing policies
Gain and risk sharing pricing
Impact of price on other parties
In selecting Final Price
company must consider additional factors

21. SETTING THE PRICE

22. Created by Khemendra Raj Pingoliya, IIT
Kanpur
during an internship
by Prof. Sameer Mathur, IIM Lucknow.
www.IIMInternship.com