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1. Setting the Pricing Level
Cabigon,Galos, Jubahib,Sumampong,Sarabillo,
Abellanosa, Montero,Banad, Bongay E., Utbo
CHAPTER 4

2. Objectives:
 Pricing Over the Product Life Cycle
 Strategies to find the price window
 Sales, Profit, and Pricing over the PLC.

3. What is Price???
Price is the one element of the marketing mix the produces
revenue.
The amount paid for some goods and services.

4. SettingaPriceLevel
Therearefourmainapproaches
tosettingapricelevel:Demand-Oriented,
Cost-Oriented,Profit-Oriented,and
Competition-Oriented.Eachhastheir
advantagesanddisadvantagesthatarespelled
outwellinyourreadings.

13. PRICING OVER PRODUCT
LIFE CYCLE

14. PRICING OVER PRODUCT LIFE CYCLE
 Understanding the product
lifecycle helps organizations to make
better pricing decisions. With clear
pricing decisions you ensure that the
product survives the cut-throat market
competition and stays afloat no matter
how challenging the situation gets.

15. The four
Product
Lifecycle
Pricing
Strategies
for
different
stages
 1. Market Introduction / Development Stage
At this stage, the product emerges, develops its
market and spreads awareness of its qualities as well as
features. In the initial stage, your business requires a
significant investment of capital to manufacture products
and to promote it. The risk faced by businesses at this stage
is generally high: focus is on the determination of the
right price point and finding their way to the minds of the
consumers.

16.  2. Growth Stage
By this stage, consumers are familiar
with your product and your brand. Your focus
should be on achieving a more significant share of
the market. Your product needs to stand out from
the crowd. Marketing has a crucial role here: if
your marketing delivers, it automatically results
in increased demand forecasts and
profit. Consumers are generally curious to
purchase your product as they are attracted to
the marketing campaign.

17.  3. Maturity Stage
Also known as the stage of saturation,
businesses generally feel there is a sudden
halt in revenue development as sales begin
to slow down. This affects the overall
growth. In general, businesses at this stage
do not require funding and the brand /
product stabilizes in the market stage.

18. •This stage is often the most challenging for your product. The existence of your
business faces risks as it is affected by market saturation, high competition and
interest changes of consumers.
•To successfully survive throughout this stage and to ensure a continuation of the
products market presence, businesses start adopting aggressive marketing
techniques. In other words, this is the “make it or break it” stage.
4. Decline Stage
Aspects that may affect your business at this stage:
Change in the interest of the consumer
Your brand cannot offer anything new to the market
Your competitors outperform in the market

19. Pricing in the
Introduction
Stage
 If your product is unique and consumers are introduced to
something completely new, then the prices can be fixed
high. With high-prices, the massive development and
promotional costs can be earned back easily.
 If the launched product already faces high competition,
then you must set the price lower than average to attract
consumers to try out your new product.
 Defining the price of a product in the initial stage is
tricky. If your prices are too high, price-
sensitive customers may refrain from giving your product
a try, and others may consider your brand as being overly
priced. On the other hand, if you set your prices too low,
you might be signalling poorer quality and consumers do
not trust your product.
 Whether your product is unique or not, you must
understand what you are offering and bringing to the
market.

20. Pricing in
Growth
Stage
 Once the market has accepted you as a
business, you need to focus on retaining
customers. This can be done by lowering
the prices. In the growth stage
businesses can earn revenue to recover
from the initial investments and
marketing expenditure as long as they are
able to set the price high enough to
cover their costs.
 Understand what the competitors are
doing in the market and set competitive
prices.
 You may have to increase volumes by price
matching the competitive market.

21. Pricing
in
Maturity
Stage
 Competition at this stage gets fierce!
Brands reach a saturation point by now, and
revenue production becomes very
challenging. The successful way out through
this is to invest in re-creating the
product and revamping it entirely to create
curiosity in customers.
 Maturity lifecycle stage pricing examples
could be: introducing special discount or
promotional prices and period
offer, providing privileges to the loyal
members and introducing exclusive
membership offer. These tactics work better
than reducing the prices as they create
curiosity in people.

22. Pricing
in
Decline
Stage
 As the market saturates and reaches its lowest, making drastic
changes in the pricing helps meet the business goals. Three
major evils that come into play at this point are high
competition, changing customer needs and market saturation.
 To tackle this stage, businesses and brands must
reduce production costs and minimize production so they won’t
get stuck with a huge inventory they then are forced to sell off
at a minimum price. The focus must be to re-establish the name
by adding new features to the product and advertise it to loyal
consumers.
 The lifecycle stage price elasticity varies at each development
stage. With the competition rising at every stage, making a
brand the top priority for the consumers becomes the most
challenging part.
 Through every stage that the product progresses the
competition increases and makes consumers more price
sensitive.

23. Conclusion
 The product life cycle pricing is a
tool for the marketers, designers and
management alike that promises overall
success of a product in a market.
Businesses can derive the most value
out of a product/service with the help
of smart pricing strategies. The rising
sale will not always mean progress;
neither declining sales always indicate
an ultimate doom.
 If product pricing is based on
understanding of its role and
importance, then it can lead to
consistent sales for a business.

24. Strategies to find the price
window