This document discusses pricing strategies and marketing channels. It begins by outlining factors to consider in digital pricing environments. It then describes the 6 steps companies should take to set prices: selecting objectives, determining demand, estimating costs, analyzing competitors, selecting pricing methods, and determining the final price. The document also discusses adapting prices through promotional pricing or price discrimination. Next, it defines marketing channels and outlines decisions for designing and managing channels. It concludes by covering e-commerce practices, potential channel conflicts, and the roles of retailing and wholesaling.
3. Understanding Pricing
✢ Pricing in a digital world
Get instant vendor price comparisons
Check prices at the point of purchase
Name your price and have it met
Get products free
Monitor customer behavior & tailor offers
Give customers access to special prices
Negotiate prices online or even in person
4. Understanding Pricing
✢ How companies
price
○ Small
companies:
boss
○ Large
companies:
division/product
line managers
✢ How companies
should price
○ Understanding of
consumer pricing
psychology
○ a systematic
approach to setting,
adapting, and
changing prices
7. Step 1: Selecting the Pricing Objective
Survival
Maximum
current
profit
Maximum
market share
Maximum
market
skimming
Product-
quality
leadership
Other
objectives
9. Step 3: Estimating Costs
✢ Types of costs and
levels of production
○ Fixed vs. variable
costs
○ Total costs
○ Average cost
✢ Accumulated
production
○ Experience/
learning curve
9
10. Step 4: Analyzing Competitors’ Prices
✢ Firm must
take
competitors’
costs, prices,
& reactions
into account
○ Value-priced
competitors
11. Step 5: Selecting a Pricing Method
✢ Markup pricing
○ Add a standard
markup to the
product’s cost
✢ Target-return
pricing
○ Price that yields
its target rate of
return on
investment
✢ Perceived-value
pricing
○ Based on buyer’s
image of product,
channel
deliverables,
warranty quality,
customer
support, and
softer attributes
(e.g., reputation
11
12. Step 6: Selecting the Final Price
✢ Additional factors to select final
price:
Impact of other marketing activities
Company pricing policies
Gain-and-risk-sharing pricing
Impact of price on other parties
17. Marketing Channels and Value Networks
✢ Marketing channels
○ Sets of
interdependent
organizations
participating in the
process of making a
product or service
available for use or
consumption
○ Intermediaries:
merchants, agents,
and facilitators
✢ Multichannel
marketing
○ Using two or more
marketing channels
to reach customer
segments in one
market area
○ Omnichannel
marketing
○ Integrated
marketing channel
system
17
18. Marketing Channels and Value Networks
The digital
channels
revolution
✢ Customer support in
store/online/phone
✢ Check online for product
availability at local stores
✢ Order product online to
pick up at store
✢ Return a product
purchased online to a
nearby store
20. The Role of Marketing Channels
✢ Channel levels
○ Zero-level
channel (direct)
○ One/two/three-
level channels
(intermediaries)
○ Reverse-flow
channels
✢ Service sector
channels
21. Channel-Design Decisions
✢ Analyzing customer needs
and wants
Desired lot size
Waiting and delivery time
Spatial convenience
Product variety
Service backup
22. Channel-Design Decisions
✢ Establishing objectives and
constraints
✢ Identifying major channel
alternatives
Types of intermediaries
Number of intermediaries
Terms/responsibilities of channel
members
23. Identifying major channel alternatives
✢ Number of
intermediaries
○ Exclusive
distribution
○ Selective
distribution
○ Intensive
distribution
23
25. E-Commerce Marketing
Practices
✢ E-commerce
○ Uses a Web site to transact or facilitate the
sale of products and services online
✢ Pure-click vs. brick-and-click companies
✢ Mobile channels and media can keep
consumers as connected and interacting
with a brand as they choose
○ Advertising and promotion
○ Geofencing
✢ Privacy issues
25
26. Conflict, Cooperation, and Competition
✢ Channel conflict
○ Generated when one channel member’s
actions prevent another channel member
from achieving its goal
✢ Channel coordination
○ Occurs when channel members are
brought together to advance the goals of
the channel instead of their own
potentially incompatible goals
30. Retailing
✢ Retailing
○ All the activities in
selling goods or
services directly to
final consumers for
personal,
nonbusiness use
✢ Retailer/retail store
○ Any business
enterprise whose
sales volume
comes primarily
from retailing
30
31. Types of retailers
✢ Store
retailers:
• Specialty store
• Department store
• Supermarket
• Convenience store
• Drug store
• Discount store
• Extreme value or
hard-discount store
• Off-price retailer
• Superstore
• Catalog showroom
32. Types of retailers
✢ Levels of service for store
retailers
Self-service
Self-selection
Limited service
Full service
33. Types of retailers
✢ Nonstore
retailing
○ Direct
marketing
○ Direct selling
○ Automatic
vending
○ Buying
services
34. The Modern Retail Marketing
Environment
✢ Competitive retail market structure
New retail forms and combinations
Growth of giant retailers
Growth of intertype competition
Emergence of fast retailing
Decline of middle-market retailers
35. The Modern Retail Marketing
Environment
✢Role of
technology
○ Retailers use
technology for
business operations,
to enhance the
consumer shopping
experience inside the
store, and
Internet/social media
strategies
36. Marketing Decisions
• Target market
• Channels
• Product assortment
• Procurement
• Prices
• Services
• Store
atmosphere
• Store activities
and
experiences
• Communicatio
ns
• Location
