3 2-10 pricing

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3 2-10 pricing

  1. 1.  Rent  Tuition  Fee  Fare  Rate  Toll  Premium  Honorarium  Special assessment  Bribe  Dues  Salary  Commission  Wage  Tax
  2. 2.  This is the only element in the marketing mix that brings in the revenues. All the rest are costs  Price communicates the value positioning of the product.
  3. 3. Select the price objective Determine demand Estimate costs Analyze competitor price mix Select pricing method Select final price
  4. 4.  Selecting the pricing objective  Determining demand  Estimating costs  Analysing competitors – costs, prices, offers  Selecting a pricing method  Selecting the final price
  5. 5.  Survival  Maximum current profit  Maximum market share – penetration pricing  Maximum market skimming  Product quality leadership
  6. 6.  Shared cost  Sunk investment  Price – quality  Inventory effect  Unique value effect  Substitute awareness  Difficult comparision  End benefit  Total expenditure
  7. 7.  This determines the changes in demand with unit change in price  If there is little or no change in demand, it is said to be price inelastic.  If there is significant change in demand, then it is said to be price elastic.
  8. 8.  There are few or no substitutes  Buyers readily do not notice the higher price  Buyers are slow to change their buying habits  Buyers think that the higher prices are justified
  9. 9.  Fixed costs  Variable costs  Learning curve  Activity based costing  Target costing
  10. 10.  Markup pricing  Target return pricing  Perceived value pricing – eg: POLAROID  Value pricing - eg: Red label  Going rate pricing  Sealed bid pricing – eg: Govt purchases  Differentiated pricing – eg: APSRTC – cat cards  Air line pricing in vacation
  11. 11.  It is used to lessen the impact of the actual pricing in the consumers mind  It is used as a surrogate to indicate the product quality or esteem
  12. 12.  Different pricing at different locations
  13. 13.  Loss leader pricing  Special event pricing  Cash rebate  Low interest financing  Longer payment terms  Warranties and service contracts  Psychological discounting
  14. 14. Thank You

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