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Pricing strategy and management

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Babasab Patil
Babasab Patil

Pricing strategy and management

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Chapter 8 Pricing Strategy and Management
Conceptual Orientation to Pricing ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Price as an Indicator of Value ,[object Object],[object Object],Value = Perceived benefits Price
Price Elasticity of Demand ,[object Object],[object Object],E = Percentage change in quantity demanded Percentage change in price where E is the coefficient of elasticity
Factors that Influence Price Elasticity of Demand ,[object Object],[object Object],[object Object]
Product-Line Pricing ,[object Object],[object Object],[object Object],[object Object]
Pricing Strategies ,[object Object],[object Object]
Full-Cost Pricing ,[object Object],[object Object],[object Object]
Variable-Cost Pricing ,[object Object],[object Object],[object Object],[object Object],Assumption is that variable-cost pricing will stimulate demand and increase revenues.
New-Offering Pricing Strategies ,[object Object],[object Object],[object Object]
Use Skimming Pricing Strategy when: ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Use Penetration Pricing Strategy when: ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Intermediate Pricing Strategy ,[object Object],[object Object],[object Object]
Pricing and Competitive Interaction ,[object Object],[object Object],[object Object],[object Object],[object Object]
Industry Characteristics and Risk of Price Wars Characteristics High Risk Low Risk Product/Service Type undifferentiated differentiated Market Growth Rate stable/decreasing increasing Price Visibility to Competitors high low Consumer Price Sensitivity high low Overall Industry Cost Trend declining stable Industry Capacity Utilization low high Number of Competitors many few

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Pricing strategy and management

  • 1. Chapter 8 Pricing Strategy and Management
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  • 15. Industry Characteristics and Risk of Price Wars Characteristics High Risk Low Risk Product/Service Type undifferentiated differentiated Market Growth Rate stable/decreasing increasing Price Visibility to Competitors high low Consumer Price Sensitivity high low Overall Industry Cost Trend declining stable Industry Capacity Utilization low high Number of Competitors many few