This document discusses pricing concepts, objectives, strategies, and factors. It begins by outlining the objectives of understanding pricing, objectives of pricing, factors influencing pricing, and pricing strategies. It then defines price and lists common pricing objectives including maximum profit, market share, product quality leadership, and matching competitors' prices. Key factors affecting pricing are identified as costs, competition, company objectives, target customers, and their willingness to pay. Common pricing strategies are then outlined, such as penetration pricing, competition pricing, bundle pricing, and premium pricing. The document provides details on various pricing strategies and concepts including price adjustment strategies, value-based versus cost-based pricing, and internal and external factors influencing pricing decisions.

1. Dr. Shanti Suresh
SIES COLLEGE OF COMMERCE & ECONOMIC

2. OBJECTIVES
• Understanding the concept Pricing
• Objectives of Pricing
• Factors influencing pricing
• Pricing strategies

3. What is Price
Price is the amount of money charged for a
product or service, or the sum of the values
that customers exchange for the benefits of
having or using the product or service.
Price is the value that is put to a
product…

4. Pricing objectives
• Survival
• Maximum current profit
• Maximum market share
• Maximum market skimming
• Product-quality leadership
• Increase Sales Volume
• Company Growth
• Match Competitors Price
• Create Interest & Excitement about the Product
• Discourage Competitors From cutting Price
• Social, Ethical & Ideological Objectives
• Discourage New Entrants

5. Factor affecting pricing
• Fixed and variable costs.
• Competition
• Company objectives
• Proposed positioning strategies.
• Target group and willingness to pay

6. Pricing Strategy
• Pricing strategy refers to method companies
use to price their products or services.
• The price of the products and services are set
on the basis their expenses
• They add on a certain percentage so they can
make a profit.
• There are several different pricing strategies to
fulfil their objectives

8. Types of pricing strategy
1. Penetration Pricing
2. Skimming Pricing
3. Competition Pricing
4. Economy Pricing
5. Bundle Pricing (Combo)
6. Psychological Pricing
7. Premium Pricing
8. One price policy
9. Discounting Pricing
10. Discriminatory Pricing
11. Promotional Pricing
12. Product line Pricing

9. PREDATORY PRICING

10. PENETRATION PRICING

11. SKIMMING PRICING

12. COMPETITION PRICING

13. ECONOMY PRICING

14. BUNDLE PRICING

15. PSYCHOLOGICAL PRICING

16. PREMIUM PRICING

17. ONE PRICE POLICY

18. DISCOUNT PRICING

19. DISCRIMINATORY PRICING
Charging a different price for the same good/service in
different markets
• Requires each market to be impenetrable
• Requires different price elasticity of demand in each
market
• Prices for rail travel differ for the same journey at
different times of the day

20. PRODUCT LINE PRICING

21. Setting Pricing Policy
1. Selecting the pricing objective
2. Determining demand
3. Estimating costs
4. Analyzing competitors’ costs, prices, and
offers
5. Selecting a pricing method
6. Selecting final price

22. Price-Adjustment Strategies
• Adjusting Prices for Psychological
Effect.
•Price Used as a Quality Indicator.
• Temporarily Reducing Prices to
Increase Short-Run Sales.
• i.e. Loss Leaders, Special-Events
• Adjusting Prices to Account for the
Geographic Location of Customers.
• i.e. FOB-Origin, Uniform-Delivered,
Zone Pricing, Basing-Point, &
Freight-Absorption.
• Adjusting Prices for International
Markets.
• Price Depends on Costs, Consumers,
Economic Conditions & Other Factors.
Psychological Pricing
Promotional Pricing
Geographical Pricing
International Pricing

23. Value-Based versus Cost-Based
Pricing
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23

24. Internal and External Considerations
Affecting Price Decision
Overall marketing
Strategy,
Objectives & Mix
Organizational
Considerations The Economy
The Government Social Concerns
The Market
&
Demand
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25. What products have inelastic
demand?
Elastic?

26. New-Product Pricing
Market-skimming
pricing
Market-penetration
pricing

27. PRODUCT MIX PRICING

28. PRICE ADJUSTMENTS

29. Responding to Price Changes

30. Pricing within Channel Levels
Prohibit
Price fixing – talking
with competitors to set
prices
Predatory pricing – selling below
cost with the intention of punishing
a competitor orputting them out of
business

31. Pricing across Channel Levels
Prohibited
Price discrimination ensure
same price to customers at
given level of trade
Price maintenance –requiring
dealers to charge a specified
retailprice
Deceptive pricing – seller
states price that may mislead
customers

32. Dr. Shanti Suresh, S.I.E.S College of Commerce & Economics 32