2. ABOUT YOUR
FACULTY
Professional Stats
Author, Researcher, Trainer & Coach
20+ years in Academia & Corporate
Doctoral Research in CRM & Retail
Markets
University medal awardee in Economics
ICF Certified Leadership Coach
Multiple freelance university associations
Personal Interests
I love Reading, Socializing & Watching movies
Life Mantra - Believe & It shall be !!
Manpreet Kaur Uppal
3. Understanding Pricing Strategies
The roadmap :
Understanding Key considerations in
pricing
Steps in determining the prices
Some popular pricing strategies
Refection- Case Study!
4. What should you be considering
when developing the price strategy ?
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5. How to decide the prices?
How to change prices with changed channels?
How to match prices with quality?
How to respond to competition?
How to price an improved product?
Key considerations
6. Understanding the three C’s
Final product price
Competit
or’s price
Cost
function
Customer
’s
demand
7. Steps in determining the pricing policy
I Understanding the pricing objective
II Estimating the level of demand
III Costs calculation
IV Analyzing competitors offerings
V Selecting a pricing method
VI Deciding the final price
8. I Understanding the pricing
objective
Survival
Maximum current
profit
Maximum market share/ penetration pricing
Maximum market
skimming
Product quality
leadership
9. II Estimating the level of demand
III Costs calculation
IV Analyzing competitors
offerings
10. CYK -1
This allows us to determine how the quantity of an offering relates to
the price at which it is offered:
Price bundling.
Price elasticity.
Price inelasticity
Price inflation
11. V Selecting a pricing method
Mark up pricing
Perceived value pricing
Going rate pricing
Auction type pricing
Sealed bid pricing
Group pricing
12. VI Deciding the final price
Psychological
pricing
Gain & risk
share pricing
Effect of
other p’s on
price
Company
pricing policy
13. CYK -2
_____________ is influenced by perceptions of the fairness of prices
set, latitude of price acceptance (customers appear willing to accept a
price within a range of prices suggesting a 'price zone of tolerance'),
magnitude (absolute price) and frequency of purchase, price
presentation (how prices are presented might produce different levels
of willingness to pay) and advertising.
Brand awareness.
Price perception.
Willingness to pay.
Price consciousness.
15. CYK -3
____________ occurs when companies temporarily reduce their prices
below the standard price for a period of time to raise awareness of the
offering to encourage trials and raise short-term brand awareness.
Promotional pricing
Relative price.
List pricing
Loss Leader Pricing
16. Case Study
Ratan Sethi opened a petrol pump cum retail store on Delhi-Agra highway, about 2-hour drive
from Delhi. His store sells typical items needed by highway travelers like fast foods, cold drinks,
hot coffee toys etc. He charges higher price compared to sellers in Delhi, yet he is able to
maintain brisk sale- particularly of ‘Yours’s Special Pack’ (YSP), consisting of soft drink in a
disposable plastic bottle and a packet of light snacks. The highway travelers prefer to stop at this
store because while their cars wait for petrol filling, they in the meantime can enjoy YSP. Each
year he could substantially increase his sales by providing special. summer price on YSP which is
almost half of its regular price.
Last year, while returning from Delhi, Ratan , found that a new big and modern store has come
up 15kms. from Delhi, on the national highway. It has affected his sales but only marginally. But
last month another large convenience store opened just 5kms away from his store. He knows
that the challenge has come to his doorsteps and he expects to be adversely affected by the
existence of these 2 stores. He needs to meet this challenge and decides to use the pricing
strategy which he has been using quite effectively till recently. He now permanently reduces the
price of YSP to half of its original price. But at the end of the year Ratan finds that his sale in
general and of YSP in particular has declined by 20%.
Where has Ratan gone wrong? As an economist, what are your suggestions to Ratan to boost
up his sales?