This document outlines pricing strategies and programs, including consumer psychology and pricing, reference prices, price-quality inferences, setting prices, market penetration pricing, price optimization, experience curve pricing, analyzing competitor prices, markup pricing, price adaptation, geographical pricing, differentiated pricing, and responding to competitor price changes. It provides concepts and examples for each strategy to illustrate how companies can develop effective pricing by understanding consumers, competitors, costs, and differentiating prices in various markets. The conclusion emphasizes understanding consumers, knowledge of competition, and excellent marketing when developing pricing programs.

1. 1Developing Pricing Strategies and ProgramsChapter 14Jose Eduardo D. LegardaASMPH Batch 2012

2. Outline: Price Strategies and ProgramsConsumer Psychology and PricingReference PricesPrice –quality InferencesSetting the PriceMarket –Penetration PricingPrice OptimizationExperience Curve PricingAnalyzing Competitor Price Mix

3. Outline: Price Strategies and ProgramsMarkup PricingPrice AdaptationGeographical PricingDifferentiated PricingRespond to Competitor’s Price Change

4. Consumer Psychology and PricingReference PricesPrice –quality inferencesPrice endingsPrice cues

5. Concept 1:Reference PricesKotler: JVC GR-D370 Mini Digital Video Camcorder Local: SRP of Car dealersMedical: Package Discount for HPV vaccine

6. Concept 2:Price –Quality InferencesKotler: Armani T-shirts v.s. Gap v.s. H&M Local: Honda City v.s. Kia RioMedical: JCI Accredited Hospitals v.s. Non- JCI accredited hospitals

7. Steps in Setting the PriceSelect the price objectivesDetermine demandEstimate costsAnalyze Competitor price mixSelect Pricing MethodSelect Final Price

8. STEP 1: Selecting the pricing objectivesSurvivalMaximum current profitMaximum market shareMaximum market skimmingProduct –quality leadership

9. Concept 3:Market –Penetration PricingKotler: IKEA in China Local: Baguio Canola OilMedical: Importation of Labeled Medicines from India

10. STEP 2: Determining DemandPrice SensitivityEstimating Demand CurvesPrice Elasticity of Demand

11. Concept 4:Price OptimizationKotler: 27” Sharp Television v.s. Sansui Local: Ynzal Computers and MacMedical: CT- scan packages v.s. X-rays

12. STEP 3: Estimating CostsStandard costingActivity Based CostingAccumulated ProductionTarget costing

13. Concept 5:Experience -Curve PricingKotler: TI calculator Industry Local: UnilabMedical: National Kidney Institue Dialysis Center

14. Concept 6:STEP 4: Analyzing Competitor’s Price MixKotler: Zantac Local: Network Providers (Globe, Smart, Sun)Medical: Private practice with HMO coverage

15. STEP 5: Selecting a Pricing MethodMarkup PricingTarget –return PricingPerceived –Value PricingValue PricingGoing –rate PricingAuction type Pricing

16. Concept 7:Markup PricingKotler: Parker Hannifan Local: Dog food Retail IndustryMedical: Immunization in private practice of Pediatricians

17. STEP 6: Selecting the Final PriceImpact of other marketing activitiesCompany pricing policiesGain and Risk sharing pricingImpact of price on other parties

18. Price Adaptation StrategiesGeographic PricingDiscount / AllowancesPromotional PricingDifferentiated Pricing

19. Concept 8:Geographical PricingKotler: Procter and Gamble 320g Tide Clean White Local: Gold Eagle BeerMedical: Various Profession fees depending on the hospital

20. Concept 9:Differentiated PricingKotler: Baltimore Orioles Local: Premium MoviesMedical: Price of Medicine in India v.s Philippines

21. Concept 10:Responding to Competitor’s Price ChangeKotler: General Mills v.s. Kellogg’s Local: Asiacraft Boat Manufacturer Medical: RiteMedv.s. Generics

22. Outline: Price Strategies and ProgramsConsumer Psychology and PricingReference PricesPrice –quality InferencesSetting the PriceMarket –Penetration PricingPrice OptimizationExperience Curve PricingAnalyzing Competitor Price Mix

23. Outline: Price Strategies and ProgramsMarkup PricingPrice AdaptationGeographical PricingDifferentiated PricingRespond to Competitor’s Price Change

24. My Conclusion: Price Strategies and programsConsumer’s PerspectiveKnowledge of CompetitionAnd excellent marketing.

25. 25Developing Pricing Strategies and ProgramsChapter 14Jose Eduardo D. LegardaASMPH Batch 2012