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1
 Akhilesh Tonpe - 38
 Mohit Rohera - 43
 Nikhil Hirani - 46
 Tushar Mirchandani - 49
What is pricing strategy?
 The method companies use to price their products or
services.
 The price can be set to
 maximize profitability for each unit sold or from the market
overall
 defend an existing market from new entrants,
 to increase market share within a market
 to enter a new market.
2
Factors affecting pricing strategies
3
Factors affecting pricing strategies
1. Customers
 Consumers are very sensitive to the
price change of a product regardless
of economic and social class.
 Products are
 Price Elastic
 Durable goods and services
 Luxury goods and services
 Price Inelastic
 Essential goods
4
Factors affecting pricing strategies
2. Competition
 How competitors price and sell their products
will have an effect on a firm’s pricing
decisions.
 Today as many products sold online,
consumers can compare the prices of many
merchants before making a purchase
decision.
5
Factors affecting pricing strategies
3. Cost
a. Product cost
 Cost related to
 Product development and
testing / R& D
 Product packaging
 Employee salaries and benefits
 Factory overheads
 Promotion and distribution of
goods and services
6
Factors affecting pricing strategies
3. Cost
b. Economy and Government
Laws and Regulations
 This includes the economic and
social environment, currency and
interest rates and unemployment
levels.
 These factors affect cost of selling
and pricing decisions
7
Pricing Strategies
8
Penetration Pricing
 The price charged for products
and services is set artificially low
in order to gain market share.
Once this is achieved, the price
is increased.
 An extreme form of penetration
pricing is called predatory
pricing
9
Penetration Pricing
10
Price Skimming
11
 The price charged for products
and services is high because the
company has a substantial
competitive advantage.
 However, the advantage tends
not to be sustainable. The high
price attracts new competitors
into the market, and the price
inevitably falls due to increased
supply.
Premium Pricing
 High price is used as a defining
criterion.
 The high pricing of premium
product is used to enhance
and reinforce a product's luxury
or high quality image
12
Competition Pricing
 Competitive pricing
consists of setting the
price at the same level
as one’s competitors.
 This method relies on the
idea that competitors
have already
thoroughly worked on
their pricing.
13
Product Line Pricing
 Where there is a range of products
or services the pricing reflects the
benefits of parts of the range.
14
Psychological Pricing
 This approach is used
when the marketer
wants the consumer to
respond on an
emotional, rather than
rational basis.
15
Cost Plus Pricing
 Cost-plus pricing is a
straightforward and
simple way to arrive at a
sales price by adding a
markup to the cost of a
product
16
Cost-based pricing
 Cost-based pricing
involves setting prices
based on the costs for
producing, distributing
and selling the product.
Also, the company
normally adds a fair rate
of return to compensate
for its efforts and risks.
17
Optional Product Pricing
 Pricing of optional or accessory
products along with a main
product. In many cases, you
can buy optional or accessory
products along with the main
product.
18
Captive Product Pricing
19
• The main product is priced less
compared to the
complementary products
Bundle Pricing
 The act of placing several
products or services together
in a single package and
selling for a lower price than
would be charged if the items
were sold separately. The
package usually includes one
big ticket product and at
least one complementary
good
20
THANK YOU
21

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Pricing Strategies - Marketing Strategy

  • 1. 1  Akhilesh Tonpe - 38  Mohit Rohera - 43  Nikhil Hirani - 46  Tushar Mirchandani - 49
  • 2. What is pricing strategy?  The method companies use to price their products or services.  The price can be set to  maximize profitability for each unit sold or from the market overall  defend an existing market from new entrants,  to increase market share within a market  to enter a new market. 2
  • 4. Factors affecting pricing strategies 1. Customers  Consumers are very sensitive to the price change of a product regardless of economic and social class.  Products are  Price Elastic  Durable goods and services  Luxury goods and services  Price Inelastic  Essential goods 4
  • 5. Factors affecting pricing strategies 2. Competition  How competitors price and sell their products will have an effect on a firm’s pricing decisions.  Today as many products sold online, consumers can compare the prices of many merchants before making a purchase decision. 5
  • 6. Factors affecting pricing strategies 3. Cost a. Product cost  Cost related to  Product development and testing / R& D  Product packaging  Employee salaries and benefits  Factory overheads  Promotion and distribution of goods and services 6
  • 7. Factors affecting pricing strategies 3. Cost b. Economy and Government Laws and Regulations  This includes the economic and social environment, currency and interest rates and unemployment levels.  These factors affect cost of selling and pricing decisions 7
  • 9. Penetration Pricing  The price charged for products and services is set artificially low in order to gain market share. Once this is achieved, the price is increased.  An extreme form of penetration pricing is called predatory pricing 9
  • 11. Price Skimming 11  The price charged for products and services is high because the company has a substantial competitive advantage.  However, the advantage tends not to be sustainable. The high price attracts new competitors into the market, and the price inevitably falls due to increased supply.
  • 12. Premium Pricing  High price is used as a defining criterion.  The high pricing of premium product is used to enhance and reinforce a product's luxury or high quality image 12
  • 13. Competition Pricing  Competitive pricing consists of setting the price at the same level as one’s competitors.  This method relies on the idea that competitors have already thoroughly worked on their pricing. 13
  • 14. Product Line Pricing  Where there is a range of products or services the pricing reflects the benefits of parts of the range. 14
  • 15. Psychological Pricing  This approach is used when the marketer wants the consumer to respond on an emotional, rather than rational basis. 15
  • 16. Cost Plus Pricing  Cost-plus pricing is a straightforward and simple way to arrive at a sales price by adding a markup to the cost of a product 16
  • 17. Cost-based pricing  Cost-based pricing involves setting prices based on the costs for producing, distributing and selling the product. Also, the company normally adds a fair rate of return to compensate for its efforts and risks. 17
  • 18. Optional Product Pricing  Pricing of optional or accessory products along with a main product. In many cases, you can buy optional or accessory products along with the main product. 18
  • 19. Captive Product Pricing 19 • The main product is priced less compared to the complementary products
  • 20. Bundle Pricing  The act of placing several products or services together in a single package and selling for a lower price than would be charged if the items were sold separately. The package usually includes one big ticket product and at least one complementary good 20