2. Product & Conventional approaches to pricing
•Product is anything that satisfies human
needs.
• Standard cost system with normal allowance for scrap,
waste, rework; zero defect standard is not practical.
• Overhead variance analysis; maximize production
volume (not quality) to absorb overhead.
• Variance analysis on:
• Raw material price
• Procedure from multiple suppliers to avoid unfavorable price
variance
• Low price/low-quality raw materials
• No emphasis on non-financial performance measure
3.
4. Profitable Pricing, Role of pricing in the
Marketing Mix
Product item
T
Product line
1. Stretching (Upward/ Downward)
2. Line pruning
Core product development
Packaging:-
• easy to carry
• easy to recognize
Packaging strategy
8. Speed to Shelf
9. Protect yourself
Consumers seek better and improved sports shoes that are comfortable and provide
value for money.
5. The Role of Price in the Purchase Decision
Since shoes market is facing stiff competition so companies adopt to
competition based approach to price the sport shoes. In this the
different strategy are:-
oCompetitive approach
oGoing rate approach
Apart from that companies also resort to psychological pricing. In
this the different types of pricing strategy are:-
o Image pricing
o Reference pricing
6. Costing for Pricing
• Market situation in which (usually two) powerful competitors
try to usurp each other's market share by progressively
reducing prices until one of them retreats, at least
temporarily.
• How to fight Price war?
Diagnosis
Prescription
Cure
flipkart/Yipme