The document outlines pricing strategies and considerations for businesses, detailing both internal and external factors that influence pricing decisions. It covers various pricing methods such as cost-oriented and market-oriented pricing, including penetration and market skimming strategies. Ultimately, the guide serves as an educational resource for understanding how to effectively set prices in different market conditions.

2. TEAM MEMBERS
 AADHIL AHAMED K
 AJINAS K.A
 ABDUL BASITH
 AJAY N.V
 ARUN P.K
 AKSHAY
MBA 1ST SEM
PRESIDENCY COLLEGE
BENGALURU

3. PRESENTATION OBJECTIVES
 To cover topics like what is price and pricing.
Factors influencing pricing decision
Methods of pricing

4. PRICE
Price may be defined as the value of product
attributes expressed in monetary terms which a
consumer pays or is expected to pay in exchange and
anticipation of the expected or offered utility.

5. PRICING
Pricing is the function of determining product value in
monetary terms by the marketing management of a
company before it is offered to the target consumer
for sale.

6. DETERMINANTS
OF PRICING
DECISON
INTERNAL
FACTORS
EXTERNAL
FACTORS
OTHER
OBJECTIVES

7. INTERNAL FACTORS
 Objectives of pricing
-Survival
-Current profit maximization
-Market share leadership
-Product quality leadership
 Marketing mix strategy
 Costs
 Organizational considerations

8. EXTERNAL FACTORS
 Pricing in different types of markets
 Consumer perceptions of price and value
 Competitors Price and offers
 Other external factors like economic position in the
country, resellers reactions and government.

10. COST ORIENTED PRICING METHOD

11. COST ORIENTED PRICING METHOD Cont…
This pricing method is the variation of cost plus pricing
wherein the percentage of mark-up is calculated on the
selling price
In this kind of pricing method the firm set the price to
yield a required Rate of Return on Investment (ROI)
from the sale of goods and services

12. MARKET ORIENTED PRICING METHOD
 Perceived-Value Pricing.
In this pricing method, the manufacturer decides the price on the basis of
customer’s perception of the goods and services taking into
consideration all the elements such as advertising, promotional tools,
additional benefits, product quality, the channel of distribution, etc.
that influence the customer’s perception.

13. MARKET ORIENTED PRICING METHOD Cont…
 Value Pricing
Under this pricing method companies design the low
priced products and maintain the high-quality
offering. Here the prices are not kept low, but the
product is re-engineered to reduce the cost of
production and maintain the quality simultaneously.

14. MARKET ORIENTED PRICING METHOD Cont…
 Going-Rate Pricing
 Differential Pricing
 Auction Type Pricing
 English Auctions
 Dutch Auctions
 Sealed-Bid Auctions

15. PENETRATION PRICING
 Price set to ‘penetrate the market’.
 ‘Low’ price to secure high volumes.
 Typical in mass market products – chocolate bars,
food stuffs, household goods, etc.
 Suitable for products with long anticipated life
cycles.
 May be useful if launching into a new market

16. MARKET SKIMMING
 In market skimming, goods are sold at higher prices at
the initial stage, so that fewer sales are needed to reach
break even.
 Gradually the price is reduced when the competition
starts in the market.
 This strategy is based on the notion that at the initial
stage of a product, there is no competition in the market
& so the price of the product can be fixed high.
 Selling a product at a high price, sacrificing high sales to
gain a high profit is therefore "skimming" the market.

17. MARKET SKIMMING Cont…
 The firm has to incur heavy expenditure on
research, advertisement & sales promotion
program of a new product.
 Therefore its necessary on the part of the firm to
keep the price of the product high to recover the
expenditure.
 Its commonly used in electronic markets when a
new range, such as Tablet PC’s, are firstly
dispatched into the market at a high price.

18. THANK YOU