Pricing
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This document discusses pricing strategies and objectives. It outlines several factors that affect pricing, including a company's goals, costs, competitors, customers, distribution channels, government regulations, product quality, demand and supply. The document then describes various pricing policies like high pricing, stable pricing, skimming pricing, penetration pricing, and price discrimination. It also discusses different methods for setting prices based on costs, demand, competition, and balancing supply and demand. The key objectives of pricing are to maximize profits, maintain market share, and meet competition.
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Cost-based pricing methods include mark-up pricing, absorption cost pricing, target rate of return pricing, and marginal cost pricing. Demand-based pricing methods are determined by what the traffic can bear, skimming pricing, and penetration pricing. Other pricing methods include competition-oriented pricing, product line pricing, tender pricing, affordability-based pricing, and differentiated pricing. Pricing strategies must be appropriate for achieving the desired objectives of the firm.
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Just "Follow Me"
it a ppt about pricing of products, a ne
* Fixed Costs = Rs. 100,000
* Selling Price per unit = Rs. 4
* Variable Costs per unit = Rs. 2
* Required Profit = Rs. 50,000
* Break Even Point (in Units) = Fixed Costs / (Selling Price per unit - Variable Costs per unit)
= Rs. 100,000 / (Rs. 4 - Rs. 2)
= Rs. 100,000 / Rs. 2
= 50,000 units
* Break Even Price = Fixed Costs + Variable Costs / Quantity
= Rs. 100,000 + Rs. 2 * 50,000
= Rs. 100,000 + Rs. 1,00,000
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Trade union
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Syllabus
Chapter-1
Introduction to objective, scope and outcome the subject
Chapter 2
Introduction: Scope and Specialization of Civil Engineering, Role of civil Engineer in Society, Impact of infrastructural development on economy of country.
Chapter 3
Surveying: Object Principles & Types of Surveying; Site Plans, Plans & Maps; Scales & Unit of different Measurements.
Linear Measurements: Instruments used. Linear Measurement by Tape, Ranging out Survey Lines and overcoming Obstructions; Measurements on sloping ground; Tape corrections, conventional symbols. Angular Measurements: Instruments used; Introduction to Compass Surveying, Bearings and Longitude & Latitude of a Line, Introduction to total station.
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Chapter 4
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Chapter 5
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Chapter 6
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Pricing
- 1. Pricing Asst Prof. Parasmani Jangid SDJ International College
- 2. Meaning • Price of a product is the monetary value which the buyer is prepared to pay for the utility value.
- 3. Pricing Objectives • Return on Investment- Firms fix the prices in such a way that a definite return is obtained on the investment made in different products. • Price Stability- Some firms who care for long run benefits of business go for price stability. They don’t reduce the price much in depression nor do they increase it during inflation.
- 4. Pricing Objectives • To maintain or increase market share- This is behind the assumption that to increase the market share, prices are to be reduced. Most of the firms agree with this. • To meet competition- Every competitor has to keep a reasonable price which is equal to or slightly less than the rivals. • To maximise profits- The ultimatum of pricing is to achieve maximum profit. Along with it the interest of the society are also to be considered.
- 5. Factors affecting pricing 1. Goal of the company 2. Cost of product 3. Competitor’s prices 4. Types of buyers & their purchasing power 5. Distribution channels
- 6. Factors affecting pricing 6. Government controls 7. Quality of the product 8. Service 9. Demand & supply 10.Stages of plc
- 7. Pricing Policies 1. High Pricing – monopoly, high price results into high profit, after competitors get entered into market, the prices goes down. E.g Apple Inc. 2. Stable Pricing- once price determined will remain stable for a particular period. E. g Parle-G 3. Skimming Pricing – very huge price in the beginning & reduce after competitors get entered.(max the profit & covering the cost) 4. Penetration Pricing- charge very low price to penetrates in the minds of consumers till they fully gets satisfied. E.g JIO
- 8. Pricing Policies 5. Target Pricing- fix % of profit on investment, fix % of profit on Selling Price. 6. What the consumers can bear pricing?- according to capacity of consumers. 7. Discouraging competitor pricing- competitors are not allowed to get settle in market. So bring the price at very low level. 8. Prevailing Pricing- main purpose is to meet the competition. 9. Price Discrimination- 1. customer-wise 2. product- wise 3. time-based 4. geographical-based
- 9. Basic methods of setting price • Cost oriented – Cost margin – Marginal cost – BEP • Demand oriented • Competition oriented
- 10. Price determination on the basis of cost • Cost plus pricing Here price is fixed adding a fixed % of profit to the cost. Cost P.U. is determined by dividing total cost by total number of units & S.P. is determined by adding fix % of profit on full cost.
- 11. Price determination on the basis of cost • Marginal Cost plus Pricing Total cost is made up of 2 costs: fixed & variable. Due to inclusion of fixed cost, cost P.U. differs for different levels of production. To avoid such a situation, fixed cost are excluded & price is determined on the basis of marginal cost which is variable cost only. Prices are so determined that if not full cost, at least marginal cost can be covered.
- 12. Price determination on the basis of cost • BEP It is a method in which price is fixed on the basis of cost & demand both. BEP is the point at which total costs & sales revenue will be equal(no profit no loss), In graph, fixed cost curve is drawn which is parallel to X axis, then total cost curve is drawn above it, then sales line is drawn. The point at which total cost line & sales line intersect is called BEP.
- 13. Balance between demand & supply • In perfect competition, prices are fixed at a point where demand & supply are equal. The producer will go on selling at a price till sales revenue exceed the cost of the product.
- 14. Competition-oriented pricing • Here prices are fixed as per competitors’ price. Such prices are of 3 types: • Price equal to competitor’s price- When there is cut throat competition • Prices higher than competitors- Monopoly • Prices lower than competitors- When its goods are of low or inferior quality.
- 15. Thank You