There are 5 price adaptation strategies a company can use: 1. Geographical pricing to set prices for customers in different locations, which may require alternative payment methods if buyers lack hard currency. 2. Price discounts and allowances to adjust list prices down for early payment, volume purchases, or off-season buying. 3. Promotional pricing techniques like loss leaders, rebates, or financing to stimulate early purchases. 4. Differential pricing to set different prices according to customer segments, products, locations, or time through various forms of price discrimination. 5. In summary, the strategies are geographical pricing, price discounts and allowances, promotional pricing, and differential pricing.

1. HOW SHOULD A COMPANY
ADAPT PRICES TO MEET
VARYING CIRCUMSTANCES AND
OPPORTUNITIES?

2. There are 5 price adaptation strategies.

3. #1 GEOGRAPHICAL PRICING

4. In this case the company decides how to price its products to
different customers in different locations & countries.

5. In this case the company decides how to price its products to
different customers in different locations & countries.
One important question here is:
How to get paid?
(when buyers lack sufficient hard currency)

6. Alternative ways to get paid:
Barter
Compensation Deal
Buyback arrangement
Offset

7. #2 PRICE DISCOUNTS AND
ALLOWANCES

8. Most companies will adjust their list price and give discounts
and allowances for early payment, volume purchases, and
off-season buying.

9. Different Price Discounts & Allowances
Discount
Quantity Discount
Functional Discount
Seasonal Discount
Allowance

10. #3 PROMOTIONAL PRICING

11. Companies can use several pricing
techniques to stimulate early purchase like;
Loss-Leader Pricing
Special Event Pricing
Special customer pricing
Cash Rebates
Low-interest financing
Longer payment terms
Warrantees and service contracts
Psychological discounting

12. #4 DIFFERENTIAL PRICING

13. Companies often adjust their basic price to accommodate
differences in customers, products, locations, and so on.

14. Companies often adjust their basic price to accommodate
differences in customers, products, locations, and so on.
Price Discrimination occurs when a company sells a product
or service at two or more prices that do not reflect a
proportional difference in costs.
There are 3 degrees of Price Discrimination

15. In first degree, the seller charges a separate price to each
customer on the intensity of his or her demand.

16. In second degree, the seller charges less to buyers of larger
volumes.

17. In third degree, the seller charges different amounts to
different classes of buyers.

18. Those classes are:
Customer Segment pricing
Product form pricing
Image pricing
Channel pricing
Location pricing
Time pricing

19. SO TO RECAP….
The strategies are:
Geographical Pricing
Price Discounts and allowances
Promotional Pricing
Differential Pricing

20. THANK YOU
.
Created by
Kunal Eapen, IIIT Allahabad
During an internship under
Prof Sameer Mathur, IIM Lucknow
www.iiminternship.com