This document discusses factors that affect pricing decisions for companies. It outlines internal factors like costs, marketing objectives, and external factors like competition and market conditions. It describes approaches to setting prices like demand-based, cost-based, and value-based pricing. Companies must consider their own costs and capabilities as well as competitor prices and customer perceptions of value when determining pricing. The goal is to set a price that maximizes profitability while attracting customers.

1. Pricing

2. Overwiew of Pricing
Prcing is the process of determining what a company will receive in exchange for
products.
The factors:
­manufacturing cost
­market place
­Competition
­market condition
­Quality of products
The charging different price depending on individual customers and situations.

3. Dynamic Pricing on the Web
allow SELLER to
●Charge lower prices,reap higher margins
●Monitor the customer behavior
●Change prices on the fly to adjust for changes in demand or costs.
●Negotiate prices in online auction exchanges.

4. Dynamic Pricing on web allow
BUYERS
●Get instant price comparisions from the thousands of vendors.
●Find and negotiation lower prices
●Negotiate prices in online auction and exchanges.

5. Three Approach to setting Price
Demand
Price
Supply
Price Segmentation
Margin Targetting and
positioning
Ecanomic approach
Product
Costs
strategies
$$$ Promotion
strategies
Cost­variable/fixed
accounting/finanae Place
approach strategies

6. Factor affecting the Pricing
Decision
External factors:
Internal factors: Nature of market
Marketing objectives and demand
Marketing mix strategy Compettion
Costs organizational Pricing Other
considerations decision environmental
factors(economy,re
sellers,goverment,s
ocial concern)

7. Internal Factors affecting Pricing
decision
●Marketing Objective:
●Company must decide on it strategies for the products.
●Survival,current profit ,market share leadership and product quality

8. Internal Factors Affecting Pricing
Decision
Marketing Mix Strategy:
●Price decision must be coordinate with products design,distribution and
promotion decision to form consistent and effective marketing program.
Target costing:
●Pricing that starts with an selling price,then target costs that will ensure that the
price is met

9. Cost:
Fixed costs
Cost that do not vary with production or sales level
●
Variable costs:
Cost that vary directly with the level of production.
●

10. External Factor Affecting Pricing
Decision
Market and Demand:
Cost set the lower limit of pricing.
The market and demand set the upper llimit.

11. Pure Competition:
Many buyers and sellers where each has little effect on the going market price.
Oligopolistic competition:
Few seller who are sensitive to each other's pricing/marketing strategies
Monoplistic Comptition:
Many buyer and seller who trade over a range of pricing
Pure Monopoly:
Market consists of a single seller.

12. External factors affecting pricing
decision
Conisider the cometitor's cost ,price and possible reaction when develop[ing a pricing
strategy
Pricing strategy influences the nature of competition
Low­price low­margin strategies inhibit competition
High­price high­margin strategies attract competition
Economic condition
Affect production cost
Afffect buyer perception of price
Reseller reaction price must be consider
Goverment may restrict or limit pricing option
Social consideration mey be taken into account

13. Compettior's price Consumeer
Product cost s and othe perception of
r internal and external factors value

14. Value­Based Pricing
●Uses buyer's perception of value not the seller's cost as the key to pricing
●Measuring preceived value can be difficult
●Consumer attitude towards pric and quality have shifted during the last decade.

15. Compitition Based Pricing
Going rate Pricing:
Firm bases is mainly on compatitors price,with less attentition on its own costs
and demand.
Sealed bid Pricing:
Firm bases its own price on how it thinks competitors will price rather than on
its own cost or on demand

16. New Products Pricing Strategies
●Set a low initial pricing order to penerate the market quickly and deeply.
●Can attract a large number of buyers quickly amd win large market share.

17. Product line pricing
●Cost difference b/w products
●Cuctomer evaluation of different features
●Competitors prices

18. My conclusion
From this we conclude that. first we have to see our compatitors pricing,quality,there
profit.The product should satisfi customer need.According to the quality and the
investment only we can fix the price.
At the initial stage the product should not be much costly.It have to be resonable.Then
after the usage of the customer we can hike our price.