introduction to marketing assignment that explain different types of price adjustment strategies which are used to engage the cutsomers

1. Name: Muhammad Fahad Bashir
Arid Number: 20-Arid-790
Class & section: BS SE 2A(m)
9th Assignment Marketing BSSE UIIT SP21
Question No.1- Study the “Price Adjustment Strategies” from Chapter
No.11. & prepare an Assignment with the new examples around you.
Examples will discuss in Monday class.
Submission Date: 20 June 2021
Price Adjustment Strategies:
Prices are not always the same rather it depends upon situation and customer differences. We
divide them into mainly seven categories:
Discountand AllowancePricing
 Segmented Pricing
 PsychologicalPricing
 PromotionalPricing
 GeographicalPricing
 Dynamic Pricing
 InternationalPricing

2. 1- Discount and Allowance Pricing:
This is introduced by the companies when they offer less price for their different products. It
may include seasonaldiscount, quantity discountand other discounts as well. While Allowance
is another type if reduced prices and it includes trade allowance and promotionalallowance.
Examples: There are different examples that we see around us. Some of them are
 Quantity Discount: MEPCO and WAPDA havedifferent billing units. For units below 100
they have lesser per unit price like 18 rupees and then from 100-200per unit price is 22
rupees and so on. Itincreases as wenumber of units increases per unit price also
increases
 Seasonal Discount: Companies like Bata and Services reducethe prices of their shows in
seasons like in winter they offer up to 35% discounton summer shoes in winter. The main
aim is to keep the production steady wholeyear.
 Discount: Dairy Milk – A famous chocolate productreduce the prices on the New Year
week so that people can enjoy and send sweets to their loved ones.
2- Segmented Pricing:
Companies adjusttheir basic prices according to difference in customers, products and

3. locations. That mean they sell same productwith different prices according to segments. It
includes product-form pricing, location pricing, customer-segmentpricing and time pricing.
Example: These are given below
 Product form Pricing: Coca-Cola have regular bottle in 30 rupees but the price of 1
litter is 90 rupees while the price of 1.5 litter coke is 120 rupees. Although the
company is samebut they havedifferent prices according to the quantities.
 Customer -SegmentedPricing: Differentcompanies like Al-Maida Hotel havedifferent
rates for their dishes for differentcustomer segmented. They include 50% less price
for kids under age 10 but for adult the price is actual. They even target their customers
according to that.
 LocationPricing:companies also adjusttheir prices according to location. KFC and
MacDonald have not same price in USA as in Pakistan. They have lesser prices and
more family offers then in USA. This depends upon different factors.
3- Psychological Pricing:
Price matters mostbecause sometimes people comparethe values and quality of productbased
on the price. So, by keeping this point in mind company set their productvalues so that they are
not too much high that people would not buy and not too low that people consider it low
quality.
Example: Few examples are given below
 Using digit of 9: Studies done by scientists at MITand the College of Chicago have
demonstrated that costs finishing in 9 provokeexpanded client interest for items. This mental
wonder is driven by the way that weread fromleft to right, so when we experience another
cost at $1.99, weseethe 1 firstand see the cost to be nearer to $1.00 than it is to $2.00
 1-Day only offer: sometimes play the psychology of customers as they introduce such
offers that customer cannot resist. like “50 % off on all products for 1 day only’’. Potential
customers believe that the sales are only temporary, they’remore likely to make their
purchases today, rather than next week. Consumers areafraid of missing out on such
an obvious deal, so they make the purchasein order to avoid this potential feeling of regret or

4. missing out.
4-Promotional Pricing:
This type of strategy is used by company to increasethe shortrun sale by temporarily
decreasing the price of product. Itcan be in different formsometimes it is in shapeof
discountwhile sometime they use special event pricing technique to draw more customers.
Examples:
 Special-Event Pricing: Companies offer discounts and rebates on festivals, during the off-
seasons with the intention to pull as many customers as possible. On Eid , Diwali and other
festivals companies introduce their special events pricing.
 Buy one, get one free promotion: Buy one, get one free deal (aka BOGO) areamong the
most popular types of sales promotions. Offering two of an in-demand products at a
reduced price and for a shorttime creates a senseof urgency that can boostsales. Papa
John’s Pizza introduced such offer to grab customers
 Cashback promotions:Nike-famous brand introduced 20% cashback on their shoes. Many
consumers would agreethat it doesn’tfeel as bad to spend money when you get some in
return. It’s almostlike paying less from the start and then having extra money to get other
desirable products.
 Social media contests andgiveaways: Audacity – a brand for headphones and other
accessories usesuch type of promotions to attract customers. A contest or giveaway on
Facebook, Instagram, or your targetaudience’s socialplatform of choice is a great way to get
new customers interested in your business and gain morequality followers.onecommon
method is to require followers to tag a certain number of people in the comments, or postto
their stories, to be entered to win.
5- Geographical Pricing:
This means to set the price according to location in different parts of country or world. a
pricing method in which customers bear the freight costs fromthe producer's location to their

5. own; examples of geographical pricing include FOBpricing, base-point pricing and zone
pricing.
Examples
 Zone Pricing-Taxation: In India, thereare multiple zones with multiple taxes per zone. So,
for example – Gujarat, which is a state in India has 15% tax whereas Delhi which is another
state has 5% tax. If the base costof the product was 100 rs, then after taxes, the cost of the
productwill be different in Gujaratas well as in Delhi. In Gujaratit will be 115 rs whereas in
Delhi it will be 105 rs. Here, the difference in prices is not due to transportation or difference
or any other cost. Here, the difference of geographicalprice is due to taxation.
6-Dynamic Pricing:
Dynamic pricing is a method firms useto constantly adjustthe price of goods/services
depending on demand.
Examples
 Airlines: The airline industry alters the price of its seats based on the type of
seat, the number of seats remaining, and the amount of time before the flight
departs. Thus, many different prices may be charged for seats on a single
flight.
 Price setting for Uber taxis –where the company advertises the price will vary
depending on demand. Consumers areable to see the likely price they will pay
before committing to the taxi.
 Google Ads. The price of paying for Google ads is determined by a marketplace
supply and demand. Ads for competitive keywords willpush up the price as there
is more demand. If a keyword becomes less competitive, the price will fall.
7-International Pricing:
Companies that sell their products in international markets or globally. They set their prices
according to that and it includes different things. They will have to decide how to price their
product in each market. Purchase power, needs, and preferences differ between countries
and so does willingness to pay for a given product or service; to maximize profit, pricing
research must be conducted for each market.
Example:

6.  Samsung Products: Samsung introduced its mobile phones that haveprice
difference in Dubai and in Pakistan . In Dubaithere is difference of almost 180$ in
price of samebrand that in Pakistan is selling at higher rates

Pair of Levis Selling: a pair of levi’s selling for 30$ in the United States mighy go
for 63$ in Tokyo and 88$ in Paris .
 Gucci Handbag: A Gucci handbag going for onluy $140 in Milan , Italy might fetch
$240 in United States.