What is the cost of the coke bottle?How much does making a ‘Maruti 800’ cost?Why is it priced at what each of these products are priced at?
Positioning.Can’t price cheaply if your position is ‘premium’.Premium‘Kitnadetahai’ – Maruti example isn’t just a funny tale.If Lambhorghini sells for the price of ALTO then premium value is lost.Various stages of organisation also decide pricing
Pricing is never a stand alone decision
Economies of ScaleLower costs at same pricing will also increase profits
Share examples of when one entity reduced prices because of competition
As discussed in earlier slide, it is possible to do Penetration pricing in FMCG. Markets are large, demand is elastic, large production can help in economies of scale and there is always intense competition and hence less uniqueness.
Big Bazaar or any other retail chain.Bundles of household goods made at the retailers end sold at a competitive price.
Attacking yourself means introduce better products than your own that are currently in the marketOffensive: We are No.2. We try harder - AVIS