This document discusses various price adjustment strategies used in marketing. It identifies six main strategies: 1) discount and allowance pricing to reward customers for behaviors like early payment or volume purchases, 2) segmented pricing where different prices are charged to different customer segments, 3) psychological pricing below whole numbers, 4) promotional pricing for temporary price reductions, 5) geographical pricing based on location, and 6) international pricing considering factors in different countries. The strategies allow companies to adjust their basic prices for customers, products, locations, and situations.

1. Principles of marketing
Lesson no – 26
Price adjustment strategies

2. Price “the 2nd p” of marketing mix

3. What is price ?....
 “The price is a critical element of
the marketing mix. The price is the sum of all the
values that a customer gives up to gain the benefits
of having or using a product or service. Thus,
customers exchange a certain value for having or
using the product – A value we call price”.

4. Price adjustment strategies.
 “price adjustment
strategies Companies usually adjust their basic prices to
account for various customer differences and Changing
situations.”
 There are followings six price-adjustment strategies.
 Discount and allowance Pricing.
 segmented pricing.
 Psychological pricing.
 Promotional pricing.
 Geographical pricing.
 International pricing.

5. Discount and allowances pricing.
 “most companies adjust there basic
price to reward customers for certain response, such as early payment of
bills, volume purchases, and of season buying. These price adjustment are
known as discount and allowances pricing strategies.

Cash discount
Seasonal
discount
Quality
discount
Functional
discount
Trade–in
allowances
Promotional
discount

6. Segmented pricing.
 companies will often adjust there basic price to allow
for differences in customers, product, and locations. In segmented pricing,
the company sells a production or services at two or more prices, even
through the difference in price is not based on differences in cost.
Customer
segment
Product
form
Location
pricing
Time
pricing

7. Psychological pricing.
 Psychological pricing is the business practices of
setting prices lower than a whole number.
 An example of psychological pricing is an item that is priced $3.99 but
conveyed by the consumer as 3 dollars and not 4 dollars, treating $3.99 as a
lower price than $4.00.

8. Promotional pricing.
 Promotional pricing is a sales strategy in which brands
temporarily reduce the price of a product or service to attract prospects and
customers. It can increase revenue, build customer loyalty, and improve
short-term cash flow. A promotional pricing strategy works best in the short-
term.


9. Geographical pricing.
 Geographical pricing is the practice of adjusting an
item's sale price based on the location of the buyer. Sometimes the difference
in the sale price is based on the cost to ship the item to that location. But the
difference may also be based on what amount the people in that location are
willing to pay.

10. International pricing.
 Companies that market their products internationally
must decide what prices to charge in the different countries in which they
operate. In some cases, a company can set a uniform worldwide price. The
price that a company should charge in a specific country depends on many
factors, including
 economic conditions
 competitive situations.
 laws and regulations.
 development of the wholesaling,
and retailing system.