This document discusses various pricing concepts and strategies that global managers must consider when setting prices internationally. It covers determining pricing objectives, estimating demand and costs, analyzing competitors, and selecting a final price. Key points include selecting objectives like market penetration or market skimming, using strategies like penetration pricing or target costing, accounting for factors like price elasticity, currency fluctuations, and government regulations. Pricing methods discussed are mark-up, target return, and value-based pricing. The document also covers international pricing policies, issues like dumping and gray markets, and terms of international sales.
Students should be able to:
Explain and evaluate the potential costs and benefits of monopoly to both firms and consumers, including the conditions necessary for price discrimination to take place
Diagrams should also be used to support the understanding of price discrimination
This PPT includes Oligopoly Market. It is explained in detail.
This is for educational purpose only. If you own any of the content please let me know. We are not here to hurt anyone's emotion. Please try to co-operate and use this for educational purposes only.
๏ฎ A market can be defined as a group of firms willing and able to sell a similar product or service to the same potential buyers.
๏ฎ Imperfect competition covers all situations where there is neither pure competition nor pure monopoly.
๏ฎ Perfect competition and pure monopoly are very unlikely to be found in the real world.
๏ฎ In the real world, it is the imperfect competition lying between perfect competition and pure monopoly.
๏ฎ The fundamental distinguishing characteristic of imperfect competition is that average revenue curve slopes downwards throughout its length, but it slopes downwards at different rates in different categories of imperfect competition.
๏ฎ Monopoly refers to the market situation where there is a
๏ฎ Single seller selling a product which has no close substitutes.
๏ฎ Monopolies are characterized by a lack of economic competition to produce the good or service, a lack of viable substitute goods, and the existence of a high monopoly price well above the firm's marginal cost that leads to a high monopoly profit
๏ฎ The word โoligopolyโ comes from the Greek โoligosโ meaning "little or smallโ and โpoleinโ meaning โto sell.โ When โoligosโ is used in the plural, it means โfewโ ,few firms or few sellers.
๏ฎ DEFINATION:
๏ฎ Oligopoly is that form of market where there are few firms and there is natural interdependence among the firms regarding price and output policy.
Students should be able to:
Explain and evaluate the potential costs and benefits of monopoly to both firms and consumers, including the conditions necessary for price discrimination to take place
Diagrams should also be used to support the understanding of price discrimination
This PPT includes Oligopoly Market. It is explained in detail.
This is for educational purpose only. If you own any of the content please let me know. We are not here to hurt anyone's emotion. Please try to co-operate and use this for educational purposes only.
๏ฎ A market can be defined as a group of firms willing and able to sell a similar product or service to the same potential buyers.
๏ฎ Imperfect competition covers all situations where there is neither pure competition nor pure monopoly.
๏ฎ Perfect competition and pure monopoly are very unlikely to be found in the real world.
๏ฎ In the real world, it is the imperfect competition lying between perfect competition and pure monopoly.
๏ฎ The fundamental distinguishing characteristic of imperfect competition is that average revenue curve slopes downwards throughout its length, but it slopes downwards at different rates in different categories of imperfect competition.
๏ฎ Monopoly refers to the market situation where there is a
๏ฎ Single seller selling a product which has no close substitutes.
๏ฎ Monopolies are characterized by a lack of economic competition to produce the good or service, a lack of viable substitute goods, and the existence of a high monopoly price well above the firm's marginal cost that leads to a high monopoly profit
๏ฎ The word โoligopolyโ comes from the Greek โoligosโ meaning "little or smallโ and โpoleinโ meaning โto sell.โ When โoligosโ is used in the plural, it means โfewโ ,few firms or few sellers.
๏ฎ DEFINATION:
๏ฎ Oligopoly is that form of market where there are few firms and there is natural interdependence among the firms regarding price and output policy.
In this paper, I will illustrate how grey markets operate in domestic and international settings, apply these concepts towards the structure of several large and active grey markets currently in operation, demonstrate the effect of these unauthorized vendors upon manufacturers and retailers in operation within said markets, discuss how these white market operators have attempted to counteract these effects, and conclude by suggesting further actions these companies may implement to work with and around unauthorized resellers.
Retail analytics - Improvising pricing strategy using markup/markdownSmitha Mysore Lokesh
ย
In this project, retail data was cleaned in the ETL process using Microsoft SQL Server 2013 and the pricing strategies formulated were visualized on Tableau dashboards.
Grey Market:
Role of Governments
Attraction of grey market to firms
Counteracting the grey market
Consumers within the grey market
Conclusion
References
In this presentation, we will discuss about various aspects of marketing channels, needs and importance, how physical distribution and channel decision are critical for marketing channels, how does marketing channel functions. We will also talk about the various distributions channel structures.
To know more about Welingkar Schoolโs Distance Learning Program and courses offered, visit: http://www.welingkaronline.org/distance-learning/online-mba.html
This case study utilizes a large database (2000 stores, 6-years of scanner data) to study pricing strategies for brands. Methods include Advanced regression, PCA and Clustering algorithms.
A very simple yet precise description of costing and pricing,with examples of both.help for both management and engineering students,specially for entrepreneurship development.like.comment and share.
CASE 3.2 A Shift for Lieutenant Colonel AdamsEAM 751 Chapter.docxannandleola
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CASE 3.2 A Shift for Lieutenant Colonel Adams
EAM 751 Chapter 3
Working with a partner complete CASE 3.2
Answer the 3 questions at the end of the chapter and submit.
Marketing Management
Fifteenth Edition
Chapter 16
Developing
Pricing Strategies
and Programs
Copyright ยฉ 2016, 2012, 2009 Pearson Education, Inc. All Rights Reserved
Copyright ยฉ 2016, 2012, 2009 Pearson Education, Inc. All Rights Reserved
Learning Objectives
16.1 How do consumers process and
evaluate prices?
16.2 How should a company set prices
initially for products or services?
16.3 How should a company adapt prices
to meet varying circumstances and
opportunities?
16.4 When and how should a company
initiate a price change?
16.5 How should a company respond to a
competitorโs price change?
Copyright ยฉ 2016, 2012, 2009 Pearson Education, Inc. All Rights Reserved
Setting the Price
Table 16.2 Steps in Setting a Pricing Policy
1. Selecting the Pricing Objective
2. Determining Demand
3. Estimating Costs
4. Analyzing Competitorsโ Costs, Prices, and Offers
5. Selecting a Pricing Method
6. Selecting the Final Price
Copyright ยฉ 2016, 2012, 2009 Pearson Education, Inc. All Rights Reserved
Step 1: Selecting the Pricing Objective
โข Survival
โข Maximum current profit
โข Other objectives
โข Maximum market share
โข Product-quality leadership
โข Maximum market skimming
Copyright ยฉ 2016, 2012, 2009 Pearson Education, Inc. All Rights Reserved
Step 2: Determining Demand
โข Price sensitivity
โข Estimating demand curves
โ Surveys, price experiments,
& statistical analysis
โข Price elasticity of demand
Copyright ยฉ 2016, 2012, 2009 Pearson Education, Inc. All Rights Reserved
Figure 16.1 Inelastic And Elastic
Demand
Copyright ยฉ 2016, 2012, 2009 Pearson Education, Inc. All Rights Reserved
Price Sensitivity
Table 16.3 Factors That Reduce Price Sensitivity
โข The product is more distinctive.
โข Buyers are less aware of substitutes.
โข Buyers cannot easily compare the quality of substitutes.
โข The expenditure is a smaller part of the buyerโs total income.
โข The expenditure is small compared to the total cost of the end product.
โข Part of the cost is borne by another party.
โข The product is used in conjunction with assets previously bought.
โข The product is assumed to have more quality, prestige, or exclusiveness.
โข Buyers cannot store the product.
Copyright ยฉ 2016, 2012, 2009 Pearson Education, Inc. All Rights Reserved
Step 3: Estimating Costs (1 of 3)
โข Types of costs and levels of
production
โ Fixed vs. variable costs
โ Total costs
โ Average cost
Figure 16.2 Cost per Unit at Different
Levels of Production per Period
Copyright ยฉ 2016, 2012, 2009 Pearson Education, Inc. All Rights Reserved
Step 3: Estimating Costs (2 of 3)
โข Accumulated production
โ Experience/learning curve
Figure 16.3 Cost per Unit as a Function of Accumulated Production: The
Experience Curve
Copyright ยฉ 2016, 2012, 2009 Pearson Educati.
Fundamentally, this comprehensive article examines the significant factors that should be taken into account before making industrial pricing strategies and policies, such as pricing objectives, demand analysis, cost analysis and competitive analysis in depth. As well as pricing strategies in competitive bidding, pricing strategies for new products and Pricing throughout the product life cycle are expected to be discussed. Furthermore, industrial pricing policies, such as list price, trade discounts, quantity discounts, cash discounts and geographical pricing will be elaborated under this article.
โ
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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.
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Presented at The Global HR Summit, 6th June 2024
In this keynote, Luan Wise will provide invaluable insights to elevate your employer brand on social media platforms including LinkedIn, Facebook, Instagram, X (formerly Twitter) and TikTok. You'll learn how compelling content can authentically showcase your company culture, values, and employee experiences to support your talent acquisition and retention objectives. Additionally, you'll understand the power of employee advocacy to amplify reach and engagement โ helping to position your organization as an employer of choice in today's competitive talent landscape.
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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
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Auditing study material for b.com final year students
ย
Pricing decisions
1. Pricing Decisions
Synonyms for Price
* Rent
* Tuition
* Fee
* Fare
* Rate
* Toll
* Premium
* Honorarium
* Price competition
* Marketer will compete by offering the product matching the competitor or at a lower price
Price - Quality Strategies
Basic Pricing Concepts
* The Global Manager must develop systems and policies that address
* Price Floors
* Price Ceilings
* Optimum Prices
* Must be consistent with global opportunities and constraints
2. Global Pricing Objectives and Strategies
* Managers must determine the objectives for the pricing objectives which may be on internal
performance:
* Unit Sales
* Market Share
* Return on investment
* They must then develop strategies to achieve those objectives
* Penetration Pricing
* Market Skimming
Step 1: Selecting the Pricing Objective
* Survival- short term, recover variable cost + some fixed cost.
* Maximum current profit- estimate demand and cost. Assumes firm knows current demand.
* In emphasizing current performance the company may sacrifice long-run performance by ignoring
the effects of:
* Other marketing-mix variables.
* Competitorsโ reactions.
* Maximum market share
* Maximum market skimming
* Product-quality leadership
3. Step 1, Pricing Objective โฆ..
Maximum market share
* believe that a higher sales volume will lead to lower unit costs and higher long-run profit.
* market-penetration pricing.
* The following conditions favor setting a low price:
* The market is highly price-sensitive, and a low price stimulates market growth.
* Production and distribution costs fall with accumulated production experience.
* A low price discourages actual and potential competition..
Penetration Pricing and Non-Financial Objectives
* Penetration Pricing
* Charging a low price in order to penetrate market quickly
* Appropriate to saturate market prior to imitation by competitors
* When Sony was developing the Walkman in 1979, initial plans called for a retail price of ยฅ50,000
($249) to achieve breakeven.
* However, it was felt that a price of ยฅ35,000 ($170) was necessary to attract the all-important youth
market segment.
* After the engineering team conceded that they could trim costs to achieve breakeven volume at a price
of ยฅ40,000, Chairman Akio Morita pushed them further and insisted on a retail price of ยฅ33,000 ($165)
to commemorate Sonyโs 33rd
anniversary.
4. * At that price, even if the initial production run of 60,000 units sold out, the company would lose $35
per unit.
* A first-time exporter is unlikely to use penetration pricing because the product may be sold at a loss,
and companies cannot absorb such losses.
* Many companies, especially those in the food industry, launch new products that are not innovative
enough to qualify for patent protection. When this occurs, penetration pricing is recommended as a
means of achieving market saturation before competitors copy the product.
Step 1, Pricing Objectiveโฆ
Maximum Market Skimming
* Companies unveiling a new technology favor setting high prices to maximize market skimming. -
* This is also called market-skimming pricing, where prices start high and are slowly lowered over
time.
* Market skimming makes sense under the following conditions:
* A sufficient number of buyers have a high current demand.
* The high initial price does not attract more competitors to the market.
* The high price communicates the image of a superior product.
Market Skimming and Financial Objectives
* Market Skimming
5. * Charging a premium price
* May occur at the introduction stage of product life cycle
* By setting a deliberately high price, demand is limited to innovators and early adopters who are willing
and able to pay the price.
* When the product enters the growth stage of the life cycle and competition increases, manufacturers
start to cut prices.
* This strategy has been used consistently in the consumer electronics industry; for example, when Sony
introduced the first consumer VCRs in the 1970s, the retail price exceeded $1,000. same for compact
disc players were launched in the early 1980s.
Buyer Decision Process for New Products
Individual Differences in Innovativeness
* Consumers can be classified into five adopter categories, each of which behaves differently toward
new products.
Product Characteristics and Adoption
* Five product characteristics influence the adoption rate.
Individual Differences in Innovativeness
INNOVATORS- Venturesome- 2.5 %
EARLY ADOPTORS- Opinion leaders- 13.5 %
EARLY MAJORITY-deliberate- 34 %
LATE MAJORITY- Sceptical- 34 %
6. LAGGARDS- Tradition bound- 16 %
Step 1 Pricing Objective โฆ..
Product-Quality Leadership
* Many brands strive to be โaffordable luxuriesโโproducts or services characterized by high levels of
perceived quality, taste, and status with a price just high enough not to be out of consumerโs reach.
Step 2: Determining Demand
* Price sensitivity
* Estimating demand curves
* Price elasticity of demand
* Each price will lead to a different level of demand and therefore have a different impact on a
companyโs marketing objectives.
* In the normal case, demand and price are inversely related; the higher the price, the lower the
demand.
* In the case of prestige goods, the demand curve sometimes slopes upward.
Price Sensitivity
* Generally speaking, customers are most price-sensitive to products that cost a lot or are bought
frequently.
* Customers are less price-sensitive to low-cost items or items they buy infrequently.
Estimating Demand Curves
7. * Most companies attempt to measure their demand curves using several different methods.
* Statistical analysis of past prices, quantities sold, and other factors can reveal their relationships.
* Price experiments.
* Surveys.
Price Elasticity of Demand
* Marketers need to know how responsive or elastic, demand would be to a change in price.
* If demand hardly changes with a small change in price, we say the demand is inelastic.
* If demand changes considerably, demand is elastic.
Demand is likely to be less elastic under the following conditions:
* There are few or no substitutes or competitors.
* Buyers do not readily notice a higher price.
* Buyers are slow to change their buying habits.
* Buyers think the higher prices are justified.
Step 3: Estimating Costs
* Demand sets a ceiling on the price the company can charge for its product. Costs set the floor.
Step 3: Estimating Costs
* Types of Costs
* Accumulated Production
* Activity-Based Cost Accounting
* Target Costing
8. Cost Terms and Production
* Fixed costs
* Variable costs
* Total costs
* Average cost
* Cost at different levels of production
Cost per unit at different levels of production
Accumulated production
* Learning curve: With accumulated learning experience the average cost declines.
* Workers learn shortcuts, materials flow more smoothly, procurement costs fall.
Average Cost falls with accumulated production experience. For producing the first 100,000 it is $ 10
--------
ACTIVITY BASED COST
* ABC tries to identify the real costs associated with each customer-
* For e.g.: Retailer 1 may want daily delivery (to keep stock lower), while retailer 2 may accept twice a
week delivery in order to get lower price.
TARGET COSTING
* Use MR to establish new productโs desired functions. Then determine the price at which at the product
will sell given its appeal and competitorsโ prices.
* Then examine each cost element- design, engineering, manufacturing, sales and re-engineer , eliminate
functions, and bring down supplier cost.
9. Target Costing โ 8 Questions
* Does the price reflect the productโs quality?
* Is the price competitive given local market conditions?
* Should the firm pursue market penetration, market skimming, or some other pricing objective?
* What type of discount (trade, cash, quantity) and allowance (advertising, trade-off) should the firm
offer its international customers?
* Should prices differ with market segment?
* What pricing options are available if the firmโs costs increase or decrease? Is demand in the
international market elastic or inelastic?
* Are the firmโs prices likely to be viewed by the host-country government as reasonable or
exploitative?
* Do the foreign countryโs dumping laws pose a problem?
Target Costing
* Cost-Based Pricing is based on an analysis of internal and external cost
* Firms using western cost accounting principles use the Full absorption cost method
* Per-unit product costs are the sum of all past or current direct and indirect manufacturing and
overhead costs
Target Costing
* Rigid cost-plus pricing means that companies set prices without regard to the eight foundational
pricing considerations
* Flexible cost-plus pricing ensures that prices are competitive in the contest of the particular market
environment
10. 4. Analyzing competitorsโ
costs, prices, and offers
* Within the range of possible prices determined by market demand and company costs, the form should
consider the nearest competitorโs price.
* Positive differentiation features should enable a firm to charge more than the competitor , if notโฆโฆ.
5. Selecting a pricing
method
* Cost set the floor to the price, competitorโs price provide an orienting point, customersโ assessment of
unique product features (demand) establishes the ceiling price.
* 5 a.MARK-UP PRICING:
Expressed as a % age of cost or SP
Rs. 15 is the desired markup, on a cost of Rs. 85,
Markup as a % age of cost: markup/cost= 15/85=17.64%
5 b.TARGET- RETURN PRICING
* Set to achieve a specified rate of return on their investments.
* E.g.: Cost of each unit = Rs. 200.
Investment made = Rs. 100,000
Expected sales = 500 units
Desired rate of return = 15 %
Product price = 200 + 0.15 x 100,000
11. 500
= Rs. 230
* 5 c. PERCEIVED VALUE PRICING
Priced according to the value perceived in the minds of the customer. Perceived value is enhanced by
using advertisement and sales promotion.
* 5 d. Going Rate Pricing:
Simply following the prevailing pricing pattern in the market. Following the market leader.
* 5 e. SEALED BID PRICING
Suitable for industrial products. Normally done in Govt. purchase.
* 5 f. VALUE PRICING:
Low price for high quality products. Times of India, Big Bazaar- EDLP- not just as a promotion offer of
โhigh-lowโ pricing (although promotions create excitement and draw shoppers).
STEP 6. Selecting final price
* In selecting the pricing method, firms should consider other factors such as :
* PSYCHOLOGICAL PRICING:
Image pricing- perfumes, cars. Quality judged by the price.
โ99โ pricing.- BATA
AKAI TV- Introductory price- Rs. 9,990 (Approx)
12. Influence of other marketing mix variables:
* The final price should take into account the brand quality and advertising relative to competition.
* Consumers are willing to pay higher prices for known brands than for unknown brands, which is more
ad. (but average relative quality)
* Distribution outlets - service quality, location, ambience and image - perception of the price of the
product.
Pricing impact on other parties
* On distributors and dealers, sales persons, Govt., customers, producers of complementary products
* Motorola cell phones meant for China & Brazil diverted to US.
Companion Products
* Products whose sale is dependent upon the sale of primary product
* Video games are dependent upon the sale of the game Console
* โIf you make money on the blades you can give away the razors.โ
Adapting the price
* Normally no single price is set. Several aspects like ;
* Geographical demand and cost- transportation , how to pay - cash ? Countertradeโฆ
* Promotional pricing- short term incentive- Loss-leader, special event (Back-to-school).
* Discriminatory pricing: Hotels and airlines, magazine subscription vs. magazine stall. Publishers price
International edition higher than Indian edition
Terms of the Sale
13. * Obtain export license if required
* Obtain currency permit
* Pack goods for export
* Transport goods to place of departure
* Prepare a land bill of lading
* Complete necessary customs export papers
* Prepare customs or consular invoices
* Arrange for ocean freight and preparation
* Obtain marine insurance and certificate of the policy
Terms of the Sale
* Incoterms
* Ex-works โ seller places goods at the disposal of the buyer at the time specified in the contract;
buyer takes delivery at the premises of the seller and bears all risks and expenses from that point
on.
* Delivery duty paid โ seller agrees to deliver the goods to the buyer at the place he or she names in
the country of import with all costs, including duties, paid.
Environmental Influences on Pricing Decisions
* Currency Fluctuations
* Inflationary Environment
* Government Controls, Subsidies, Regulations
* Competitive Behavior
14. * Sourcing
Global Pricing: Three Policy Alternatives
* Extension
* Adaptation
* Geocentric
Gray Market Goods
* Trademarked products are exported from one country to another where they are sold by unauthorized
persons or organizations
* Occurs when product is in short supply, when producers use skimming strategies in some markets, and
when goods are subject to substantial mark-ups
Dumping
* Sale of an imported product at a price lower than that normally charged in a domestic market or
country of origin.
* Occurs when imports sold in the US market are priced at either levels that represent less than the cost
of production plus an 8% profit margin or at levels below those prevailing in the producing countries
* To prove, both price discrimination and injury must be shown
Price Fixing
* Representatives of two or more companies secretly set similar prices for their products
* Illegal act because it is anticompetitive
* Horizontal price fixing occurs when competitor within an industry that make and market the same
product conspire to keep prices high
* Vertical price fixing occurs when a manufacture conspires with wholesalers/retailers to ensure certain
retail prices are maintained
15. Transfer Pricing
* Pricing of goods, services, and intangible property bought and sold by operating units or divisions of a
company doing business with an affiliate in another jurisdiction
* Intra-corporate exchanges
* Cost-based transfer pricing
* Market-based transfer pricing
* Negotiated transfer pricing
Countertrade
* Countertrade occurs when payment is made in some form other than money
* Options
* Barter
* Counter-purchase
* Offset
* Compensation trading
* Cooperation agreements
* Switch trading
Barter
* The least complex and oldest form of bilateral, non-monetary counter-trade
* A direct exchange of goods or services between two parties
Incoterms
16. * FAS (free alongside ship) named port of destination โ seller places goods alongside the vessel or other
mode of transport and pays all charges up to that point
* FOB (free on board) โ sellerโs responsibility does not end until goods have actually been placed aboard
ship
* CIF (cost, insurance, freight) named port of destination โ risk of loss or damage of goods is transferred
to buyer once goods have passed the shipโs rail
* CFR (cost and freight) โ seller is not responsible at any point outside of factory
Extension
* Ethnocentric
* Per-unit price of an item is the same no matter where in the world the buyer is located
* Importer must absorb freight and import duties
* Fails to respond to each national market
Adaptation
* Polycentric
* Permits affiliate managers or independent distributors to establish price as they feel is most desirable
in their circumstances
* Sensitive to market conditions but creates potential for gray marketing
Geocentric
* Intermediate course of action
* Recognizes that several factors are relevant to pricing decision
* Local costs
* Income levels
* Competition
17. * Local marketing strategy
Currency Fluctuations
Inflationary Environment
* Defined as a persistent upward change in price levels
* Can be caused by an increase in the money supply
* Can be caused by currency devaluation
* Essential requirement for pricing is the maintenance of operating margins
Government Controls, Subsidies, and Regulations
* The types of policies and regulations that affect pricing decisions are:
* Dumping legislation
* Resale price maintenance legislation
* Price ceilings
* General reviews of price levels
Competitive Behavior
* If competitors do not adjust their prices in response to rising costs it is difficult to adjust your pricing
to maintain operating margins
* If competitors are manufacturing or sourcing I a lower-cost country, it may be necessary to cut prices
to stay competitive
Using Sourcing as a Strategic Pricing Tool
* Marketers of domestically manufactured finished products may move to offshore sourcing of certain
components to keep costs down and prices competitive