This document discusses pricing strategies for services. It explains that effective pricing requires considering costs, competition, and customer value. Revenue management can improve profits by allocating capacity to high-paying customers through restrictions like advance booking. Ethical pricing requires clear, logical schedules and communicating customer benefits. Key questions in price design include how much to charge, payment terms, and communicating prices.
Setting Product Strategy
What is a Product?
Components of the Market Offering
Durability and Tangibility
Use
Consumer Goods Classification
The Product Hierarchy (using life insurance example)
Product Systems and Mixes
Product Line Analysis
Packaging , labeling warranties
Packaging Objectives
Functions of Labels
Services Marketing
Chapter – 9
Pricing Of Services
Introduction
Pricing or Price is the key element in the traditional marketing mix (the 4Ps) and also the enhanced marketing mix (the 7 Ps). This is the element which earns revenue. This is highly critical because this is the strategy which can make or mar the business.
The firms must make it both ways –the price must
(1) get profits for the firm, and
(2) give value to its customers.
Names of Service Pricing
Pricing for goods is easy and straight forward, while for services it is complicated, may be controlled by several authorities, varies with time, place, people, etc.
For goods the price has a single name “PRICE”, but for services it has several names like :
Names of Service Prices
What Makes Service Pricing Different?
No Ownership of Services
Higher Ratio of Fixed Costs to Variable Costs
Variability of Both Inputs and Outputs.
Many Services Are Hard to Evaluate
Setting Product Strategy
What is a Product?
Components of the Market Offering
Durability and Tangibility
Use
Consumer Goods Classification
The Product Hierarchy (using life insurance example)
Product Systems and Mixes
Product Line Analysis
Packaging , labeling warranties
Packaging Objectives
Functions of Labels
Services Marketing
Chapter – 9
Pricing Of Services
Introduction
Pricing or Price is the key element in the traditional marketing mix (the 4Ps) and also the enhanced marketing mix (the 7 Ps). This is the element which earns revenue. This is highly critical because this is the strategy which can make or mar the business.
The firms must make it both ways –the price must
(1) get profits for the firm, and
(2) give value to its customers.
Names of Service Pricing
Pricing for goods is easy and straight forward, while for services it is complicated, may be controlled by several authorities, varies with time, place, people, etc.
For goods the price has a single name “PRICE”, but for services it has several names like :
Names of Service Prices
What Makes Service Pricing Different?
No Ownership of Services
Higher Ratio of Fixed Costs to Variable Costs
Variability of Both Inputs and Outputs.
Many Services Are Hard to Evaluate
This presentation is created as a part of a Marketing internship and is based on Chapter 11- 'Setting Product Strategy" from Kotler book of Marketing Management
Consumer Behavior in a Services ContextSurya Reddy
Overview of Consumer Behavior in a service context:
Consumer Decision Making: The Three-Stage Model
Pre-purchase Stage
Service Encounter Stage
Post-purchase Stage
Service Positioning
After a service strategy has been identified, a company must decide how to position its product most effectively. The concept of positioning involves establishing a distinctive place in the minds of target customers relative to competing products.
In “The New Positioning: The Latest on the World's #1 Business Strategy”, Jack Trout distills the essence of positioning into the following four principles
1. A company must establish a position in the minds of its targeted customers.
2. The position should be singular, providing one simple and consistent message.
3. The position must set a company apart from its competitors.
4. A company cannot be all things to all people—it must focus its efforts.
Positioning and Marketing Strategy
Companies use positioning strategies to distinguish their services from competitors and to design communications that convey their desired position to customers and prospects in the chosen market segments. There are a number of different dimensions around which positioning strategies can be developed.
This presentation is created as a part of a Marketing internship and is based on Chapter 11- 'Setting Product Strategy" from Kotler book of Marketing Management
Consumer Behavior in a Services ContextSurya Reddy
Overview of Consumer Behavior in a service context:
Consumer Decision Making: The Three-Stage Model
Pre-purchase Stage
Service Encounter Stage
Post-purchase Stage
Service Positioning
After a service strategy has been identified, a company must decide how to position its product most effectively. The concept of positioning involves establishing a distinctive place in the minds of target customers relative to competing products.
In “The New Positioning: The Latest on the World's #1 Business Strategy”, Jack Trout distills the essence of positioning into the following four principles
1. A company must establish a position in the minds of its targeted customers.
2. The position should be singular, providing one simple and consistent message.
3. The position must set a company apart from its competitors.
4. A company cannot be all things to all people—it must focus its efforts.
Positioning and Marketing Strategy
Companies use positioning strategies to distinguish their services from competitors and to design communications that convey their desired position to customers and prospects in the chosen market segments. There are a number of different dimensions around which positioning strategies can be developed.
Pricing In Marketing - UNIT-5 & 6-PRICING.pptetebarkhmichale
The law of attraction is the most powerful force in the universe. If you work against it, it can only bring you pain and misery. Successful people know this but have kept it hidden from the lower class for centuries because they did not want to share their wealth. The universal law of attraction is simple. We attract whatever we choose to give our attention to. If we focus on bad things, we will attract more bad things. But the minute you stop focusing on bad and focus on good, you change the pattern and now good things start coming your way.
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Whatever you do during the course of a day, whatever thoughts you think about, you are attracting. If you use it every day, regularly, and practice it this way, you will eventually find that it becomes a habit that you will subconsciously practice.
You may not believe it, but the steps you need to take are easy. But you must do them, believe in them, and believe in yourself, or they will not work. Are you ready to get tuned into the universe and get clear? Can you work in harmony with the laws of the universe and become successful?
If so here are the steps you need to follow:
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2. Visualize what you want and vibrate to it. You must form a mental image in your mind so you can see it as if you had it in your possession. For women, you can do the
Unveiling the Secrets How Does Generative AI Work.pdfSam H
At its core, generative artificial intelligence relies on the concept of generative models, which serve as engines that churn out entirely new data resembling their training data. It is like a sculptor who has studied so many forms found in nature and then uses this knowledge to create sculptures from his imagination that have never been seen before anywhere else. If taken to cyberspace, gans work almost the same way.
[Note: This is a partial preview. To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
Sustainability has become an increasingly critical topic as the world recognizes the need to protect our planet and its resources for future generations. Sustainability means meeting our current needs without compromising the ability of future generations to meet theirs. It involves long-term planning and consideration of the consequences of our actions. The goal is to create strategies that ensure the long-term viability of People, Planet, and Profit.
Leading companies such as Nike, Toyota, and Siemens are prioritizing sustainable innovation in their business models, setting an example for others to follow. In this Sustainability training presentation, you will learn key concepts, principles, and practices of sustainability applicable across industries. This training aims to create awareness and educate employees, senior executives, consultants, and other key stakeholders, including investors, policymakers, and supply chain partners, on the importance and implementation of sustainability.
LEARNING OBJECTIVES
1. Develop a comprehensive understanding of the fundamental principles and concepts that form the foundation of sustainability within corporate environments.
2. Explore the sustainability implementation model, focusing on effective measures and reporting strategies to track and communicate sustainability efforts.
3. Identify and define best practices and critical success factors essential for achieving sustainability goals within organizations.
CONTENTS
1. Introduction and Key Concepts of Sustainability
2. Principles and Practices of Sustainability
3. Measures and Reporting in Sustainability
4. Sustainability Implementation & Best Practices
To download the complete presentation, visit: https://www.oeconsulting.com.sg/training-presentations
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
Discover the innovative and creative projects that highlight my journey throu...dylandmeas
Discover the innovative and creative projects that highlight my journey through Full Sail University. Below, you’ll find a collection of my work showcasing my skills and expertise in digital marketing, event planning, and media production.
What is the TDS Return Filing Due Date for FY 2024-25.pdfseoforlegalpillers
It is crucial for the taxpayers to understand about the TDS Return Filing Due Date, so that they can fulfill your TDS obligations efficiently. Taxpayers can avoid penalties by sticking to the deadlines and by accurate filing of TDS. Timely filing of TDS will make sure about the availability of tax credits. You can also seek the professional guidance of experts like Legal Pillers for timely filing of the TDS Return.
Enterprise Excellence is Inclusive Excellence.pdfKaiNexus
Enterprise excellence and inclusive excellence are closely linked, and real-world challenges have shown that both are essential to the success of any organization. To achieve enterprise excellence, organizations must focus on improving their operations and processes while creating an inclusive environment that engages everyone. In this interactive session, the facilitator will highlight commonly established business practices and how they limit our ability to engage everyone every day. More importantly, though, participants will likely gain increased awareness of what we can do differently to maximize enterprise excellence through deliberate inclusion.
What is Enterprise Excellence?
Enterprise Excellence is a holistic approach that's aimed at achieving world-class performance across all aspects of the organization.
What might I learn?
A way to engage all in creating Inclusive Excellence. Lessons from the US military and their parallels to the story of Harry Potter. How belt systems and CI teams can destroy inclusive practices. How leadership language invites people to the party. There are three things leaders can do to engage everyone every day: maximizing psychological safety to create environments where folks learn, contribute, and challenge the status quo.
Who might benefit? Anyone and everyone leading folks from the shop floor to top floor.
Dr. William Harvey is a seasoned Operations Leader with extensive experience in chemical processing, manufacturing, and operations management. At Michelman, he currently oversees multiple sites, leading teams in strategic planning and coaching/practicing continuous improvement. William is set to start his eighth year of teaching at the University of Cincinnati where he teaches marketing, finance, and management. William holds various certifications in change management, quality, leadership, operational excellence, team building, and DiSC, among others.
"𝑩𝑬𝑮𝑼𝑵 𝑾𝑰𝑻𝑯 𝑻𝑱 𝑰𝑺 𝑯𝑨𝑳𝑭 𝑫𝑶𝑵𝑬"
𝐓𝐉 𝐂𝐨𝐦𝐬 (𝐓𝐉 𝐂𝐨𝐦𝐦𝐮𝐧𝐢𝐜𝐚𝐭𝐢𝐨𝐧𝐬) is a professional event agency that includes experts in the event-organizing market in Vietnam, Korea, and ASEAN countries. We provide unlimited types of events from Music concerts, Fan meetings, and Culture festivals to Corporate events, Internal company events, Golf tournaments, MICE events, and Exhibitions.
𝐓𝐉 𝐂𝐨𝐦𝐬 provides unlimited package services including such as Event organizing, Event planning, Event production, Manpower, PR marketing, Design 2D/3D, VIP protocols, Interpreter agency, etc.
Sports events - Golf competitions/billiards competitions/company sports events: dynamic and challenging
⭐ 𝐅𝐞𝐚𝐭𝐮𝐫𝐞𝐝 𝐩𝐫𝐨𝐣𝐞𝐜𝐭𝐬:
➢ 2024 BAEKHYUN [Lonsdaleite] IN HO CHI MINH
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➢FreenBecky 1st Fan Meeting in Vietnam
➢CHILDREN ART EXHIBITION 2024: BEYOND BARRIERS
➢ WOW K-Music Festival 2023
➢ Winner [CROSS] Tour in HCM
➢ Super Show 9 in HCM with Super Junior
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➢ Korean Vietnam Partnership - Fair with LG
➢ Korean President visits Samsung Electronics R&D Center
➢ Vietnam Food Expo with Lotte Wellfood
"𝐄𝐯𝐞𝐫𝐲 𝐞𝐯𝐞𝐧𝐭 𝐢𝐬 𝐚 𝐬𝐭𝐨𝐫𝐲, 𝐚 𝐬𝐩𝐞𝐜𝐢𝐚𝐥 𝐣𝐨𝐮𝐫𝐧𝐞𝐲. 𝐖𝐞 𝐚𝐥𝐰𝐚𝐲𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞 𝐭𝐡𝐚𝐭 𝐬𝐡𝐨𝐫𝐭𝐥𝐲 𝐲𝐨𝐮 𝐰𝐢𝐥𝐥 𝐛𝐞 𝐚 𝐩𝐚𝐫𝐭 𝐨𝐟 𝐨𝐮𝐫 𝐬𝐭𝐨𝐫𝐢𝐞𝐬."
VAT Registration Outlined In UAE: Benefits and Requirementsuae taxgpt
Vat Registration is a legal obligation for businesses meeting the threshold requirement, helping companies avoid fines and ramifications. Contact now!
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Kseniya Leshchenko: Shared development support service model as the way to ma...Lviv Startup Club
Kseniya Leshchenko: Shared development support service model as the way to make small projects with small budgets profitable for the company (UA)
Kyiv PMDay 2024 Summer
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Youtube – https://www.youtube.com/startuplviv
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Cracking the Workplace Discipline Code Main.pptxWorkforce Group
Cultivating and maintaining discipline within teams is a critical differentiator for successful organisations.
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Although discipline is not a one-size-fits-all approach, it can help create a work environment that encourages personal growth and accountability rather than solely relying on punitive measures.
In this deck, you will learn the significance of workplace discipline for organisational success. You’ll also learn
• Four (4) workplace discipline methods you should consider
• The best and most practical approach to implementing workplace discipline.
• Three (3) key tips to maintain a disciplined workplace.
Tata Group Dials Taiwan for Its Chipmaking Ambition in Gujarat’s DholeraAvirahi City Dholera
The Tata Group, a titan of Indian industry, is making waves with its advanced talks with Taiwanese chipmakers Powerchip Semiconductor Manufacturing Corporation (PSMC) and UMC Group. The goal? Establishing a cutting-edge semiconductor fabrication unit (fab) in Dholera, Gujarat. This isn’t just any project; it’s a potential game changer for India’s chipmaking aspirations and a boon for investors seeking promising residential projects in dholera sir.
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Putting the SPARK into Virtual Training.pptxCynthia Clay
This 60-minute webinar, sponsored by Adobe, was delivered for the Training Mag Network. It explored the five elements of SPARK: Storytelling, Purpose, Action, Relationships, and Kudos. Knowing how to tell a well-structured story is key to building long-term memory. Stating a clear purpose that doesn't take away from the discovery learning process is critical. Ensuring that people move from theory to practical application is imperative. Creating strong social learning is the key to commitment and engagement. Validating and affirming participants' comments is the way to create a positive learning environment.
2. Learning Objectives
Determine three foundations to pricing a service
Compare cost based to activity based pricing
Manage customer perceptions of non-monetary costs of
obtaining service
Examine how revenue management can improve
profitability
Reflect on the key ethical concerns in service pricing
Study seven key questions for price schedule design
3. Background
Pricing of services is complicated
Eg diff fare schedules for a full price aircraft, tuition
fees etc
Key goal is to manage revenues in certain way that
supports firms profitability objectives
Real challenges are to price services for which
calculating unit costs are difficult and allocating fixed
costs is complex
Increasingly customers complain of pricing
schedules which are confusing and unfair
5. What Makes Service Pricing Strategy
Different and Difficult?
Marketing- depends upon good business model and
brings revenue
Harder to calculate financial costs than a manufactured
good- no ownership of services
Difficulty in defining a ―unit of service‖
Services hard to evaluate
Customers may be prepared to pay more for faster
delivery
Delivery through physical or electronic channels—may
create differences in perceived value
6. Alternative Objectives for Pricing
Revenue and profit objectives
Seek profit
Make largest possible cont or profit
Achieve specific target level but no max profit
Cover costs
Cover fully allocated costs, incremental costs
Patronage and user-based objectives
Build demand-maximize demand, full capacity utilization
Build a user base- stimulate trial and adoption of
service, build market share or large user base
9. The Pricing Tripod
Costs: A firm needs to recover usually impose a min
price for a specific service offering and the
customers perceived value of the offering sets a
maximum or ceiling
Price: charged by competitors for similar or
substitute services typically determines where the
price should be set
Objectives : determine where actual prices should
be set given the feasible range provided by the
10. Cost-Based Pricing:
Traditional vs. Activity-Based Costing
Traditional costing approach
Labour and infrastructure costs are considered fixed costs
Service firms have higher ratio of fixed to variable costs
found in manufacturing
Cost reduction decisions often cut these costs which leads to
reduced service levels and unhappy customers
Activity-based costing (ABC)
Sets of delivery activities and related costs
Firms can pinpoint profitability of different services, channels
etc
When looking at prices, customers care about value to
themselves, not what service production costs the firm
11. Competition-Based Pricing
When customers don’t see a difference between
competitive offerings, they choose the cheapest
Price competition is reduced when
Non- price related costs of using competing alternatives are
high
Personal relationships matter Eg hairdresser, family medical
care
Switching costs are high
Time and location specificity reduce choice
When competing on price take into account the entire
cost to customers including:
All related financial and non-monetary costs PLUS switching
costs
Compare this cost to the competition
12. Value-Based Pricing
Understanding Net Value
Customers evaluate
competition by comparing their
perceived benefits to their
perceived outlays
Net value= Perceived benefits-
Perceived costs,+ve diff=
greater value
Service pricing strategies
should enhance perceived
value by:
Reducing uncertainty
Relationship enhancement
Low cost leadership
Manage value perception
Perceived
benefits
Time
e
Effort
Perceived
outlays
13. Service pricing strategy- enhance value by
• If customers unsure of value- they will
remain with the same supplier or not change
at all
• Benefit driven pricing and flat rate pricing
Reducing
uncertainty
• Discounts: for new customers ,not very attractive
• Creative schemes: price and non price reqd, give
vol discounts, pricing when two or more is bought
together
Relationship
enhancement
• Low priced services- appeal to customers with
budget issues
• Should convince customers that low price not
means poor quality but good value. Eg
SpiceJet,Jetlite
Cost leadership
• Value is subjective, customers lack expertise to assess the quality
and value they receive
• Credence services for which – diff to assess quality of service
,consultants must communicate time, research, professional
expertise and attention
Managing value
perception
14. Reduce Related Monetary and Non-
Monetary Costs
Incremental financial outlays
Includes the price of purchasing service and other expenses
Expenses associated with search, purchase activity, usage
E.g. Two theatre tickets also requires the cost of
parking, babysitters etc.
Non-monetary costs
Time costs: time usage
Physical costs: fatigue and discomfort
Psychological (mental) costs: mental effort, perceived
risk, cognitive dissonance, fear etc
Sensory costs (unpleasant sights, sounds,
feel, tastes, smells)
15. Defining Total User Costs
Physical effort
Psychological
burdens
Sensory
burdens
Necessary
follow-up
Problem
solving
Incidental
expenses
Operating costs
Purchase
Time
Money
* Includes all five
cost categories
Search costs*
Purchase and
service encounter
costs
After costs*
18. Revenue Management (RM)
Sophisticated approach to manage supply and demand under varying degrees
of constraint- sets prices according to predicted demand levels among different
market segments
RM charges more for customers booking service closer to time of consumption
instead of on a first come first served basis
Charge different value segments different prices for same product
Predicts how many customers will use a given service at a specific time at
each of several different price levels and then allocates capacity at each level
or price bucket
If booking pace for a higher-paying segment is stronger than
expected, additional capacity is allocated to this segment and taken away from
the lowest- paying segment
Rate fences allow customers to self segment on the basis of service
characteristics and willingness to pay.
This helps companies restrict lower prices to customers willing to accept
certain restrictions
19. Key Categories of Rate Fences
Rate Fences Examples
Physical (product-related) Fences
Basic product Class of travel (business/economy class)
Size and furnishing of a hotel room
Seat location in a theatre
Amenities Free breakfast at a hotel, airport pickup, etc.
Free golf cart at a golf course
Service level Priority wait-listing
Increase in baggage allowances
Dedicated service hotlines
Dedicated account management team
20. Key Categories of Rate Fences (2)
Table 5.2
Nonphysical Fences
Transaction Characteristics
Time of booking or
reservation
Requirements for advance purchase
Must pay full fare two weeks before departure
Location of booking or
reservation
Passengers booking air tickets for an identical
route in different countries are charged
different prices
Flexibility of ticket
usage
Fees/penalties for canceling or changing a
reservation (up to loss of entire ticket price)
Nonrefundable reservation fees
21. Key Categories of Rate Fences
Nonphysical Fences (cont’d)
Consumption Characteristics
Time or duration of
use
Early-bird special in restaurant before 6PM
Must stay over on Saturday for airline, hotel
Must stay at least 5 days
Location of
consumption
Price depends on departure location, especially
in international travel
Prices vary by location (between cities, city
centre versus edges of city)
22. Key Categories of Rate Fences Table 5.2
Nonphysical Fences (cont’d)
Buyer Characteristics
Frequency or volume of
consumption
Member of certain loyalty tier with the firm
get priority pricing, discounts, or loyalty
benefits
Group membership Child, student, senior citizen discounts
Affiliation with certain groups (e.g., alumni)
Size of customer group Group discounts based on size of group
23. Relating Price Buckets and Fences to
Demand Curve
Price
per
seat
Capacity of 1st
class cabin
Capacity of aircraftNo. of seats demanded
1st class
Full fare economy (no restrictions)
1 - week advance purchase
1 - week advance purchase, Saturday night stay
3 - week advance purchase, Saturday night stay
Specified flights, book on Internet, no
changes/refunds
Late sales through
consolidators/Internet, no
refunds
3-week advance purchase, Saturday night stay, $100
for changes
* Dark areas denote amount of consumer surplus (goal of segmented pricing is to reduce this)
25. Designing Fairness into Revenue
Management
Design clear, logical, and fair price schedules and
fences
Use high published prices and present fences as
opportunities for discounts rather than quoting lower
prices and using fence as basis to impose
surcharges
Communicate consumer benefits of revenue
management
Use bundling to ―hide‖ discounts
Take care of loyal customers
Use service recovery to compensate for overbooking
27. Pricing Issues:
Putting Strategy into Practice
How much to charge?
What basis for pricing?
Who should collect payment?
Where should payment be made?
When should payment be made?
How should payment be made?
How to communicate prices?
28. Summary
The three foundations to pricing a service are costs, competition and
value to customer
Activity based pricing is better than traditional pricing approaches
Incremental financial outlays and non-monetary such as physical effort
play a role in customers price perception
Revenue management can improve profitability by allocating service
capacity to high paying customers and creating restrictions for low paying
customers
Key ethical concerns in service pricing rest on clear, logical and fair
pricing
There are seven key questions for price schedule design