Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Marketing Dynamics Pricing1


Published on

Published in: Business, News & Politics
  • Be the first to comment

Marketing Dynamics Pricing1

  1. 1. Pricing: its role and influencing factors Ike-Elechi Ogba
  2. 2. Lecture objective <ul><li>To understand the concept of pricing, its role and influencing factors </li></ul>
  3. 3. What is price? <ul><li>The amount of money paid for a product, or the agreed value placed on the exchange by a buyer and seller, (Jobber, 2004). </li></ul><ul><li>A medium of exchange; what is offered in return for something else; usually measured in terms of money, Brassington and Pettitt, 2003, p. 1106). </li></ul>
  4. 4. What is price (cont.)? <ul><li>The amount of money charged for a product or service, or the sum of the values that consumers exchange for the benefits of having or using the product or service, Kotler et al 2005, p. 665). </li></ul>
  5. 5. The role of Price in Marketing <ul><li>Role of price/pricing depends on the perspective: </li></ul><ul><li>Customers perspective: </li></ul><ul><li>Value perspective: financial/investment, </li></ul><ul><li>Functional perspective: performance related, e.g.: washing machine. </li></ul><ul><li>Quality perspective: e.g.: hand made Belgium chocolate, BMW. </li></ul><ul><li>Personal benefits perspective: social class or ego attached to market offering (product/services) by the customer: Property in “Kensington” London and “Gateshead” Northeast. </li></ul>
  6. 6. The role of Pricing (cont.) <ul><li>Sellers perspective: </li></ul><ul><li>Source for generating revenue </li></ul><ul><li>Cost recovery strategy </li></ul><ul><li>Profit making (profit=total revenue-total cost) </li></ul><ul><li>Tool for effective competition </li></ul><ul><li>Market penetration tool/instrument </li></ul><ul><li>Tool for classification of market offering: e.g., high priced product=high quality. </li></ul><ul><li>But be careful. </li></ul>
  7. 7. Factors influencing Pricing <ul><li>Internal factors: </li></ul><ul><li>Organisations Marketing objectives </li></ul><ul><li>Organisations marketing-Mix strategy </li></ul><ul><li>Costs (production, administrative, other organisational costs) </li></ul><ul><li>Organisational price choice. </li></ul>
  8. 8. Factors influencing Pricing (cont.) <ul><li>External factors </li></ul><ul><li>Market demand and supply </li></ul><ul><li>Nature and structure of market: pure competition, monopolistic, oligopolistic markets. </li></ul><ul><li>Competitors price and market offerings </li></ul><ul><li>Other macro-environmental factors: STEP </li></ul>