The document discusses factors that affect pricing decisions for marketing management. Internal factors include marketing objectives, marketing mix strategy, and costs. External factors include the nature of the market and demand, competition, and other environmental considerations. The document then examines various pricing strategies such as cost-based pricing, competition-based pricing, new product pricing, product mix pricing, discount pricing, psychological pricing, and promotional pricing.
This document provides an overview of pricing strategies and concepts. It defines price and discusses factors to consider in pricing, such as product costs, company objectives, market demand, competition, and psychological factors. Various pricing strategies are outlined, including cost-based pricing, market-based pricing, competition-based pricing, and differential, competitive, and product line pricing approaches. International pricing, price elasticity, price expectations, and tools for understanding consumer price sensitivity are also summarized. The document concludes with criteria for determining when to charge lower or higher prices based on company objectives and product specifications.
This document discusses psychological pricing strategies used by businesses to influence customer purchasing decisions. It describes techniques like charm pricing, reframing prices to seem smaller by removing commas or charging in installments. Other strategies aim to maximize reference prices by exposing customers to higher incidental prices or decoy products. Businesses can also reduce the pain of paying through bundling, shifting focus to time, or following the rule of 100 for discounts. The goal is to use customers' emotional responses to encourage sales.
This document discusses various considerations for pricing decisions and strategies. It covers topics such as pricing objectives, analyzing demand curves, cost-based pricing, competition-based pricing, differential pricing strategies, product line pricing, psychological pricing techniques, and adjusting prices. Key factors that influence pricing decisions are identified, such as costs, demand, competition, target markets, and product life cycles. Different pricing strategies like price skimming, penetration pricing, and bundling are also explained.
The document discusses pricing decisions and advertising. It covers the meaning of pricing, objectives of pricing like market penetration and skimming. Factors influencing pricing like costs, competition and economic conditions are examined. Methods of pricing such as cost-plus, target-profit and going-rate pricing are outlined. Advertising is defined and its characteristics like being paid communication and exposing prospects to messages are explained. Various advertising mediums like newspapers, magazines, radio, television and direct mail are also described.
This document outlines various pricing strategies and considerations for setting prices. It discusses determining costs, market research, pricing goals, analyzing competitors, and selecting a pricing strategy. The strategies covered include market skimming, market penetration, premium pricing, loss leader pricing, going rate pricing, tender pricing, price discrimination, promotional pricing, predatory pricing, and target pricing. The document emphasizes understanding costs, market research, and selecting the appropriate strategy to meet pricing objectives and strengthen chances of achieving sales and profit goals.
Price is a key element of the marketing mix that generates revenue. It communicates the value of a product and is determined based on customer perceived value and costs. When setting prices, companies analyze factors like demand, costs, competition and select objectives like profit maximization. Appropriate pricing requires estimating demand curves and price elasticity to understand customer sensitivity.
The document discusses various aspects of pricing strategy and methods. It defines pricing strategy as a plan for setting prices that considers factors like costs, competition, and demand. Some key determinants in setting prices are organizational objectives, costs, competition, and buyers' perceptions. Common pricing methods include cost-based pricing, demand-based pricing, and competition-based pricing. A company's pricing policy guides its overall pricing approach and specific pricing methods are then used to set prices regularly.
Distribution channels are an important part of the supply chain that focuses on making products available to customers. Channel decisions can significantly impact what consumers pay, with distribution costs sometimes accounting for over 60% of the retail price. While more efficient channels like supermarkets have lower margins, distribution still makes up around 30% of the consumer price. Producers have various channel options to sell directly to consumers or through retailers, agents, wholesalers or a hybrid system. The objectives are to make the right products available to customers at the right time and place cost effectively while meeting service requirements.
This document provides an overview of pricing strategies and concepts. It defines price and discusses factors to consider in pricing, such as product costs, company objectives, market demand, competition, and psychological factors. Various pricing strategies are outlined, including cost-based pricing, market-based pricing, competition-based pricing, and differential, competitive, and product line pricing approaches. International pricing, price elasticity, price expectations, and tools for understanding consumer price sensitivity are also summarized. The document concludes with criteria for determining when to charge lower or higher prices based on company objectives and product specifications.
This document discusses psychological pricing strategies used by businesses to influence customer purchasing decisions. It describes techniques like charm pricing, reframing prices to seem smaller by removing commas or charging in installments. Other strategies aim to maximize reference prices by exposing customers to higher incidental prices or decoy products. Businesses can also reduce the pain of paying through bundling, shifting focus to time, or following the rule of 100 for discounts. The goal is to use customers' emotional responses to encourage sales.
This document discusses various considerations for pricing decisions and strategies. It covers topics such as pricing objectives, analyzing demand curves, cost-based pricing, competition-based pricing, differential pricing strategies, product line pricing, psychological pricing techniques, and adjusting prices. Key factors that influence pricing decisions are identified, such as costs, demand, competition, target markets, and product life cycles. Different pricing strategies like price skimming, penetration pricing, and bundling are also explained.
The document discusses pricing decisions and advertising. It covers the meaning of pricing, objectives of pricing like market penetration and skimming. Factors influencing pricing like costs, competition and economic conditions are examined. Methods of pricing such as cost-plus, target-profit and going-rate pricing are outlined. Advertising is defined and its characteristics like being paid communication and exposing prospects to messages are explained. Various advertising mediums like newspapers, magazines, radio, television and direct mail are also described.
This document outlines various pricing strategies and considerations for setting prices. It discusses determining costs, market research, pricing goals, analyzing competitors, and selecting a pricing strategy. The strategies covered include market skimming, market penetration, premium pricing, loss leader pricing, going rate pricing, tender pricing, price discrimination, promotional pricing, predatory pricing, and target pricing. The document emphasizes understanding costs, market research, and selecting the appropriate strategy to meet pricing objectives and strengthen chances of achieving sales and profit goals.
Price is a key element of the marketing mix that generates revenue. It communicates the value of a product and is determined based on customer perceived value and costs. When setting prices, companies analyze factors like demand, costs, competition and select objectives like profit maximization. Appropriate pricing requires estimating demand curves and price elasticity to understand customer sensitivity.
The document discusses various aspects of pricing strategy and methods. It defines pricing strategy as a plan for setting prices that considers factors like costs, competition, and demand. Some key determinants in setting prices are organizational objectives, costs, competition, and buyers' perceptions. Common pricing methods include cost-based pricing, demand-based pricing, and competition-based pricing. A company's pricing policy guides its overall pricing approach and specific pricing methods are then used to set prices regularly.
Distribution channels are an important part of the supply chain that focuses on making products available to customers. Channel decisions can significantly impact what consumers pay, with distribution costs sometimes accounting for over 60% of the retail price. While more efficient channels like supermarkets have lower margins, distribution still makes up around 30% of the consumer price. Producers have various channel options to sell directly to consumers or through retailers, agents, wholesalers or a hybrid system. The objectives are to make the right products available to customers at the right time and place cost effectively while meeting service requirements.
11. pricing products pricing considerations and strategiesabc
1) The document discusses various pricing strategies for new products, including market skimming which sets a high initial price to maximize revenues from early adopters, and market penetration which sets a low initial price to attract a large number of customers quickly.
2) It also covers strategies for pricing a product mix, such as setting price steps between different products or optional accessories to maximize overall profits. Discounts and allowances are also discussed to incentivize customers or channel members.
3) Psychological pricing tactics are mentioned, where price is used as a signal for quality even when customers cannot directly assess it, through reference prices, odd pricing, or temporary promotional pricing. The challenges of creating "deal-prone" customers through
Place mix or distribution mix refers to the set of activities and decisions involved in making products available to customers. This includes managing distribution channels and logistics to ensure customers can access the right products at the right time, place, price and manner. Distribution channels involve decisions around channel members like retailers and wholesalers, as well as physical distribution logistics. The goal is to move products from manufacturers to customers in an efficient way that creates value for both parties. Marketing intermediaries like agents, wholesalers and retailers play important roles within distribution channels by linking manufacturers with end users.
The document discusses various factors and strategies companies consider when setting prices. It covers internal factors like costs, objectives, and competitors as well as external factors like demand, the market, and regulations. The document also outlines three main approaches to setting prices - cost-based, value-based, and competition-based - as well as various pricing strategies companies use like discounts, price discrimination, and adjusting prices.
This document discusses pricing strategies and concepts. It covers setting pricing objectives and policies, determining costs and analyzing competitors. It discusses different pricing methods like market skimming pricing and market penetration pricing for new products. It also covers pricing adjustment strategies like discounts, segmented pricing and promotional pricing. Finally, it discusses reasons for initiating price cuts or increases and how to respond to competitors' price changes. The key takeaways are that pricing involves considering costs, competitors and customer value to determine the optimal price point. Pricing strategies can be used to maximize profits, market share or revenue based on business objectives and market conditions. Price changes also require understanding reasons for changes and managing customer and competitor reactions.
Cost-based pricing methods include mark-up pricing, absorption cost pricing, target rate of return pricing, and marginal cost pricing. Demand-based pricing methods are determined by what the traffic can bear, skimming pricing, and penetration pricing. Other pricing methods include competition-oriented pricing, product line pricing, tender pricing, affordability-based pricing, and differentiated pricing. Pricing strategies must be appropriate for achieving the desired objectives of the firm.
The document discusses key aspects of monopoly markets including:
- A monopoly is defined as a single seller of a product without close substitutes that controls the entire market.
- Features of monopoly include barriers to entry that allow the firm to be a price maker and make independent output decisions.
- Monopolies can maximize profits in the short run but aim for normal profits in the long run to deter new competition.
- Monopolies are economically inefficient as they produce at lower output levels than would be optimal, resulting in deadweight loss.
How does marketing affect customer valueSameer Mathur
The document discusses how marketing affects customer value through the value delivery process. It describes the key phases of value delivery as assessing market opportunities and customer needs, choosing target segments and positioning, designing offerings and pricing, distributing products, and communicating value. It also outlines the core business processes that winning companies use to manage relationships with customers, develop new offerings, and acquire and retain customers. These processes help companies efficiently explore new opportunities, create valuable offerings, and deliver value to customers.
This document discusses various competition-based pricing strategies that companies can use, including price leadership, predatory pricing, penetration pricing, skimming pricing, prestige pricing, price discrimination, and promotional pricing. It notes that price leadership involves a dominant firm setting prices that competitors then follow. Predatory pricing aims to drive out rivals but can be anti-competitive. Penetration pricing uses low initial prices to gain market share, while skimming pricing charges high initial prices for innovative products before competitors enter. The document also outlines advantages and disadvantages of competition-based pricing strategies.
The document discusses various pricing strategies and approaches. It covers factors that influence pricing decisions, both internal like costs and objectives, and external like competitors and consumer perceptions. It also describes three main approaches to determining prices: cost-based using costs of production, buyer-based using perceived value, and competition-based by considering competitors' prices. Specific pricing strategies are also outlined, like penetrating the market with low introductory prices or "skimming the cream" with high initial prices.
The document discusses various pricing strategies used by companies, including price discounts, promotional pricing, differentiated pricing, and responding to competitors' price changes. It also covers legal aspects of pricing such as price fixing, price discrimination, predatory pricing, and deceptive advertising. Overall, the document provides an overview of different approaches to setting prices, factors companies consider when adjusting prices, and legal issues related to pricing.
The document discusses various pricing strategies and determinants of price. It covers cost-based pricing approaches like cost-plus pricing and marginal cost pricing. It also discusses competition-based pricing strategies like penetration pricing. Other topics include product life cycle pricing, price discrimination, export pricing, and peak load pricing. The key factors that influence pricing decisions are the degree of competition, objectives of the firm, costs of production, demand in the market, and supply of the product.
This document discusses cost based pricing. Cost based pricing sets the price of a product based on the costs to produce it, including direct costs, indirect costs, and an additional amount for profit. The key advantages are that it is simple and flexible to adjust prices as costs change. However, it ignores factors like demand, competition, and brand positioning. There are different types of cost based pricing like cost plus pricing, full cost pricing, and target profit pricing.
This document outlines different pricing strategies and concepts discussed in a chapter on pricing from a marketing textbook. It covers new product pricing strategies like market skimming and market penetration pricing. It also discusses product mix pricing strategies, price adjustment strategies, factors to consider when changing prices, and public policy issues related to pricing. The overall topic is pricing strategies and concepts for marketing products and services.
The document discusses various pricing strategies and concepts, including new product pricing strategies like market skimming and market penetration pricing. It also covers product mix pricing strategies, price adjustment strategies such as discounts and segmented pricing, and factors to consider when making price changes. Public policy concerns related to pricing such as predatory pricing and unfair trade practices are also summarized.
The product life cycle outlines the typical stages a product goes through from introduction to decline. It includes introduction, growth, maturity, and decline. During introduction, sales are low and costs are high to create awareness. Growth sees increasing sales and profits as the product gains acceptance. Maturity is the most profitable stage as sales peak. In decline, sales decrease as the product becomes outdated. Businesses can extend the cycle through advertising, price reductions, new features, exploring new markets, and packaging updates. The model helps marketers strategize but products don't always follow predictable cycles.
Pricing Products: Pricing Considerations and StrategiesGhila Valenzuela
Price is a key element of the marketing mix that must be carefully considered. There are several approaches to setting prices, including cost-based approaches that consider production costs, buyer-based approaches that focus on customer perceived value, and competition-based approaches that examine competitor prices. Additionally, pricing strategies such as market skimming, market penetration, product mix pricing, and price adjustments can be used. Many factors both internal and external to the firm must be analyzed to determine the optimal pricing strategy.
There are several basic pricing strategies for retailers including markup pricing, vendor pricing, competitive pricing, and psychological pricing. EDLP (everyday low pricing) and HILO (high-low pricing) are two common approaches, with EDLP more suitable for stores like Walmart that promise low prices on all items and HILO more common for department stores that run frequent sales. Care must be taken when running promotions, as too frequent discounts can condition customers to only buy on sale and undermine a retailer's brand.
The document discusses pricing strategies and objectives. It explains that price is the only element of the marketing mix that generates revenue, while other elements like product, place and promotion result in costs. The key objectives for setting prices include survival, maximizing current profits, gaining maximum market share through penetration pricing, utilizing market skimming for new products, and being a quality leader through premium "affordable luxury" pricing. Firms estimate costs, including fixed, variable and total costs, and determine demand curves through surveys, price experiments and statistical analysis to identify the optimal price point between the price ceiling of demand and price floor of costs.
The document discusses various pricing strategies that can be used including penetration pricing, market skimming, value pricing, loss leader pricing, psychological pricing, price leadership, tender pricing, price discrimination, predatory pricing, absorption cost pricing, marginal cost pricing, contribution pricing, target pricing, and cost-plus pricing. It provides examples and explanations of when each strategy may be suitable.
11. pricing products pricing considerations and strategiesabc
1) The document discusses various pricing strategies for new products, including market skimming which sets a high initial price to maximize revenues from early adopters, and market penetration which sets a low initial price to attract a large number of customers quickly.
2) It also covers strategies for pricing a product mix, such as setting price steps between different products or optional accessories to maximize overall profits. Discounts and allowances are also discussed to incentivize customers or channel members.
3) Psychological pricing tactics are mentioned, where price is used as a signal for quality even when customers cannot directly assess it, through reference prices, odd pricing, or temporary promotional pricing. The challenges of creating "deal-prone" customers through
Place mix or distribution mix refers to the set of activities and decisions involved in making products available to customers. This includes managing distribution channels and logistics to ensure customers can access the right products at the right time, place, price and manner. Distribution channels involve decisions around channel members like retailers and wholesalers, as well as physical distribution logistics. The goal is to move products from manufacturers to customers in an efficient way that creates value for both parties. Marketing intermediaries like agents, wholesalers and retailers play important roles within distribution channels by linking manufacturers with end users.
The document discusses various factors and strategies companies consider when setting prices. It covers internal factors like costs, objectives, and competitors as well as external factors like demand, the market, and regulations. The document also outlines three main approaches to setting prices - cost-based, value-based, and competition-based - as well as various pricing strategies companies use like discounts, price discrimination, and adjusting prices.
This document discusses pricing strategies and concepts. It covers setting pricing objectives and policies, determining costs and analyzing competitors. It discusses different pricing methods like market skimming pricing and market penetration pricing for new products. It also covers pricing adjustment strategies like discounts, segmented pricing and promotional pricing. Finally, it discusses reasons for initiating price cuts or increases and how to respond to competitors' price changes. The key takeaways are that pricing involves considering costs, competitors and customer value to determine the optimal price point. Pricing strategies can be used to maximize profits, market share or revenue based on business objectives and market conditions. Price changes also require understanding reasons for changes and managing customer and competitor reactions.
Cost-based pricing methods include mark-up pricing, absorption cost pricing, target rate of return pricing, and marginal cost pricing. Demand-based pricing methods are determined by what the traffic can bear, skimming pricing, and penetration pricing. Other pricing methods include competition-oriented pricing, product line pricing, tender pricing, affordability-based pricing, and differentiated pricing. Pricing strategies must be appropriate for achieving the desired objectives of the firm.
The document discusses key aspects of monopoly markets including:
- A monopoly is defined as a single seller of a product without close substitutes that controls the entire market.
- Features of monopoly include barriers to entry that allow the firm to be a price maker and make independent output decisions.
- Monopolies can maximize profits in the short run but aim for normal profits in the long run to deter new competition.
- Monopolies are economically inefficient as they produce at lower output levels than would be optimal, resulting in deadweight loss.
How does marketing affect customer valueSameer Mathur
The document discusses how marketing affects customer value through the value delivery process. It describes the key phases of value delivery as assessing market opportunities and customer needs, choosing target segments and positioning, designing offerings and pricing, distributing products, and communicating value. It also outlines the core business processes that winning companies use to manage relationships with customers, develop new offerings, and acquire and retain customers. These processes help companies efficiently explore new opportunities, create valuable offerings, and deliver value to customers.
This document discusses various competition-based pricing strategies that companies can use, including price leadership, predatory pricing, penetration pricing, skimming pricing, prestige pricing, price discrimination, and promotional pricing. It notes that price leadership involves a dominant firm setting prices that competitors then follow. Predatory pricing aims to drive out rivals but can be anti-competitive. Penetration pricing uses low initial prices to gain market share, while skimming pricing charges high initial prices for innovative products before competitors enter. The document also outlines advantages and disadvantages of competition-based pricing strategies.
The document discusses various pricing strategies and approaches. It covers factors that influence pricing decisions, both internal like costs and objectives, and external like competitors and consumer perceptions. It also describes three main approaches to determining prices: cost-based using costs of production, buyer-based using perceived value, and competition-based by considering competitors' prices. Specific pricing strategies are also outlined, like penetrating the market with low introductory prices or "skimming the cream" with high initial prices.
The document discusses various pricing strategies used by companies, including price discounts, promotional pricing, differentiated pricing, and responding to competitors' price changes. It also covers legal aspects of pricing such as price fixing, price discrimination, predatory pricing, and deceptive advertising. Overall, the document provides an overview of different approaches to setting prices, factors companies consider when adjusting prices, and legal issues related to pricing.
The document discusses various pricing strategies and determinants of price. It covers cost-based pricing approaches like cost-plus pricing and marginal cost pricing. It also discusses competition-based pricing strategies like penetration pricing. Other topics include product life cycle pricing, price discrimination, export pricing, and peak load pricing. The key factors that influence pricing decisions are the degree of competition, objectives of the firm, costs of production, demand in the market, and supply of the product.
This document discusses cost based pricing. Cost based pricing sets the price of a product based on the costs to produce it, including direct costs, indirect costs, and an additional amount for profit. The key advantages are that it is simple and flexible to adjust prices as costs change. However, it ignores factors like demand, competition, and brand positioning. There are different types of cost based pricing like cost plus pricing, full cost pricing, and target profit pricing.
This document outlines different pricing strategies and concepts discussed in a chapter on pricing from a marketing textbook. It covers new product pricing strategies like market skimming and market penetration pricing. It also discusses product mix pricing strategies, price adjustment strategies, factors to consider when changing prices, and public policy issues related to pricing. The overall topic is pricing strategies and concepts for marketing products and services.
The document discusses various pricing strategies and concepts, including new product pricing strategies like market skimming and market penetration pricing. It also covers product mix pricing strategies, price adjustment strategies such as discounts and segmented pricing, and factors to consider when making price changes. Public policy concerns related to pricing such as predatory pricing and unfair trade practices are also summarized.
The product life cycle outlines the typical stages a product goes through from introduction to decline. It includes introduction, growth, maturity, and decline. During introduction, sales are low and costs are high to create awareness. Growth sees increasing sales and profits as the product gains acceptance. Maturity is the most profitable stage as sales peak. In decline, sales decrease as the product becomes outdated. Businesses can extend the cycle through advertising, price reductions, new features, exploring new markets, and packaging updates. The model helps marketers strategize but products don't always follow predictable cycles.
Pricing Products: Pricing Considerations and StrategiesGhila Valenzuela
Price is a key element of the marketing mix that must be carefully considered. There are several approaches to setting prices, including cost-based approaches that consider production costs, buyer-based approaches that focus on customer perceived value, and competition-based approaches that examine competitor prices. Additionally, pricing strategies such as market skimming, market penetration, product mix pricing, and price adjustments can be used. Many factors both internal and external to the firm must be analyzed to determine the optimal pricing strategy.
There are several basic pricing strategies for retailers including markup pricing, vendor pricing, competitive pricing, and psychological pricing. EDLP (everyday low pricing) and HILO (high-low pricing) are two common approaches, with EDLP more suitable for stores like Walmart that promise low prices on all items and HILO more common for department stores that run frequent sales. Care must be taken when running promotions, as too frequent discounts can condition customers to only buy on sale and undermine a retailer's brand.
The document discusses pricing strategies and objectives. It explains that price is the only element of the marketing mix that generates revenue, while other elements like product, place and promotion result in costs. The key objectives for setting prices include survival, maximizing current profits, gaining maximum market share through penetration pricing, utilizing market skimming for new products, and being a quality leader through premium "affordable luxury" pricing. Firms estimate costs, including fixed, variable and total costs, and determine demand curves through surveys, price experiments and statistical analysis to identify the optimal price point between the price ceiling of demand and price floor of costs.
The document discusses various pricing strategies that can be used including penetration pricing, market skimming, value pricing, loss leader pricing, psychological pricing, price leadership, tender pricing, price discrimination, predatory pricing, absorption cost pricing, marginal cost pricing, contribution pricing, target pricing, and cost-plus pricing. It provides examples and explanations of when each strategy may be suitable.
O documento descreve a dinâmica proposta para o seminário, incluindo as seguintes sessões: Marketing & Método com apresentações da ELO Group e Michael Rosemann seguidas de discussão em grupo; Visão Estratégica & Governança também com apresentações da ELO Group e Michael Rosemann e discussão em grupo.
The document discusses various pricing strategies and considerations for setting prices. It covers topics like customer value-based pricing, cost-based pricing, competition-based pricing, and other strategies. Various factors are examined that affect pricing decisions, such as costs, customer perceptions of value, competitors' prices, and market conditions. The document provides an overview of key concepts in pricing as well as examples and factors to consider for different pricing models.
There are several factors that companies consider when setting prices for their products and services. These include internal factors like costs, marketing objectives, and external factors like competition and demand. Dynamic pricing allows sellers to change prices depending on individual customers and market conditions using approaches like cost-plus, value-based, competition-based, and product line pricing. Companies also use promotional pricing strategies like discounts, allowances, and segmented pricing to attract customers.
Premier Cement is a leading cement manufacturer in Bangladesh. It produces ordinary Portland cement and Portland composite cement. Premier Cement uses an integrated marketing communications strategy including advertising, sales promotions, public relations, and sponsorships to promote its brands and increase sales. It aims campaigns at both existing and potential customers. Premier Cement coordinates its various communication channels and evaluates the effectiveness of its IMC programs. However, its communications could be expanded to better cover target markets and drive desired customer responses.
O documento discute vários tópicos relacionados a preços, incluindo: 1) definições de preço e fatores que influenciam a formulação de preços; 2) estratégias de precificação como preços baseados em custos e concorrência; 3) preços psicológicos e fatores que influenciam a percepção do consumidor sobre preços.
O documento fornece uma introdução à técnica de condições no SAP para determinação de preços, cobrindo conceitos como tipos de condição, tabelas de condições, sequências de acesso e esquemas de cálculo. A configuração envolve modificar o catálogo de campos para permitir campos personalizados nas tabelas de condições.
O documento apresenta políticas de preços para combos de vagas de estacionamento, oferecendo descontos quanto maior o número de vagas adquiridas. Também define preços unitários e totais para diferentes quantidades de vagas, além de valores para manutenção educacional e TI para diferentes números de vagas.
This document provides an overview of marketing management concepts from Versatile Business School in Chennai, India. It defines marketing and discusses the evolution of marketing approaches from production and sales to modern relationship marketing. It also explains key marketing mix elements of product, price, place, and promotion. Different pricing strategies and factors influencing pricing decisions are outlined. The document also discusses product differentiation and how companies can distinguish their products from competitors.
O documento discute modelos de preços para produtos ampliados. Apresenta dois modelos principais: o Modelo Molecular, que analisa elementos tangíveis e intangíveis de um serviço, e o Modelo dos Serviços Centrais e Periféricos, que distingue serviços centrais de serviços suplementares de facilitação e ampliação. Também discute como clientes avaliam diferentes aspectos além do preço monetário, como tempo e conveniência.
This document discusses various strategies for pricing services, including cost-based pricing, competition-based pricing, and value-based pricing. It notes that services have higher fixed costs and it can be difficult to establish costs for intangibles. The document also covers topics like price discrimination, communicating value to customers, and ethical concerns around pricing strategies.
Chapter 06 setting prices and implementing revenue managementNardin A
This chapter discusses pricing strategies for services. It covers setting prices based on costs, value to customers, and competitors. Revenue management aims to maximize revenue by adjusting prices for different customer segments. Rate fences help separate segments. The chapter also addresses ethical issues in pricing complexity and fairness. Effective implementation requires determining the price level and basis, who collects payment, and how to communicate prices.
Pricing services is more complex than pricing goods due to several factors: customer knowledge of service prices can vary; services often have high variability between providers; and providers may be unwilling to estimate prices in advance as the nature of the service is not fully known until delivery. Non-monetary costs like time, search, convenience, and psychological costs also influence demand. While reputation and advertising are preferred quality cues, price may be viewed as a quality signal, especially for high-risk services. Common approaches to pricing services include cost-based pricing using direct and overhead costs, competition-based pricing by monitoring competitors, and demand-based pricing by relating price to customer perceived value.
Identifying Market Segments and Selecting Target MarketsSumit Pradhan
This document discusses market segmentation and target marketing. It explains that companies identify distinct customer groups, select one or more segments to target, and position their product to appeal to the target segment. The document outlines various ways to segment markets, such as by geography, demographics, psychographics, and behavior. It also discusses criteria for evaluating segment attractiveness and different strategies for selecting target markets, such as concentrating on a single segment or pursuing multiple segments.
Services Marketing
Chapter – 9
Pricing Of Services
Introduction
Pricing or Price is the key element in the traditional marketing mix (the 4Ps) and also the enhanced marketing mix (the 7 Ps). This is the element which earns revenue. This is highly critical because this is the strategy which can make or mar the business.
The firms must make it both ways –the price must
(1) get profits for the firm, and
(2) give value to its customers.
Names of Service Pricing
Pricing for goods is easy and straight forward, while for services it is complicated, may be controlled by several authorities, varies with time, place, people, etc.
For goods the price has a single name “PRICE”, but for services it has several names like :
Names of Service Prices
What Makes Service Pricing Different?
No Ownership of Services
Higher Ratio of Fixed Costs to Variable Costs
Variability of Both Inputs and Outputs.
Many Services Are Hard to Evaluate
The document discusses various concepts related to global marketing, including different approaches to entering international markets, adapting marketing mixes for other countries, and the three major forms of international marketing organization. It also provides examples of how companies like Coca-Cola have successfully expanded globally by balancing standardization with local adaptation. The overall roadmap previews how international trade systems, economic, political-legal, and cultural factors influence global marketing decisions.
Pricing , penetration or skimming model of pricingAlan Cherian
The document discusses various pricing strategies that companies can use including penetration pricing, premium pricing, price skimming, economy pricing, and psychological pricing. It provides details on penetration pricing, including that it aims to capture market share by entering with a low price. While it can help with adoption and word-of-mouth initially, it can also establish long-term low price expectations that are difficult to raise later. Price skimming is described as launching a new product at a high initial price to earn high profits before gradually lowering costs over time. The advantages include high margins for cost recovery but disadvantages include increased competition and potentially limiting sales.
There are internal and external factors that determine price. Internal factors include marketing objectives, costs, and organizational considerations. External factors include market demand, competition, economic conditions, and government actions. When setting price, companies consider costs, value to customers, competition, and promotional strategies. The optimal pricing strategy depends on the product, market conditions, and business objectives.
This document discusses various factors and strategies for setting prices. It outlines 6 general pricing approaches: 1) factors affecting prices, 2) general pricing approaches, 3) new product pricing strategies, 4) product mix pricing strategies, 5) price adjustment strategies, and 6) factors to consider when setting prices. Some key strategies mentioned include cost-based, value-based, and competition-based pricing as well as market skimming, penetration pricing, product-bundle pricing, and geographical pricing.
This document discusses pricing concepts including price, pricing objectives, factors affecting pricing decisions, determining demand, methods of pricing, and pricing strategies. It defines price and lists common pricing objectives like profit maximization, sales growth, and competition. It outlines internal factors like marketing objectives and external factors like costs that influence pricing decisions. It describes methods for determining demand and different approaches to setting prices including cost-based pricing, competition-based pricing, and various pricing strategies.
This document discusses factors that affect pricing decisions for companies. It outlines internal factors like costs, marketing objectives, and external factors like competition and market conditions. It describes approaches to setting prices like demand-based, cost-based, and value-based pricing. Companies must consider their own costs and capabilities as well as competitor prices and customer perceptions of value when determining pricing. The goal is to set a price that maximizes profitability while attracting customers.
The document discusses factors that influence pricing decisions for marketing managers. It identifies internal factors like objectives, costs and external factors like competition and market demand. It describes different pricing strategies such as cost-based, demand-based and competition-based pricing. Specific strategies discussed include penetration pricing, image pricing, price bundling and premium pricing. The document provides guidelines on when to increase, decrease or sell below cost.
Price is the only element of the marketing mix that generates revenue. There are several stages to establishing prices, beginning with selecting a pricing objective and determining customer demand and costs. Common pricing strategies include cost-based pricing, competition-based pricing, differential pricing for different customer segments, and promotional pricing to temporarily reduce prices. The specific final price is determined based on the pricing objective, customer perceptions of value, demand analysis, and consideration of costs and competitive factors.
This document discusses pricing strategies and factors that affect pricing decisions. It explains that pricing is the process of determining the revenue a company will receive for its products. Pricing must achieve financial goals, fit market realities, and support product positioning. Factors like costs, customers, competition, and other variables influence pricing. Common pricing strategies include penetration pricing, skimming pricing, competition pricing, product line pricing, bundle pricing, psychological pricing, premium pricing, and optional pricing. The document also outlines basic pricing guidelines and different types of price discounts.
This is useful for educators and learners of MBA, which is made in lucid style for easier understanding and to be a handy tool before exams or while teaching.
This document discusses pricing strategies and considerations. It defines price as the amount charged for a product or service. Major pricing strategies discussed include customer value-based pricing, cost-based pricing, good-value pricing, value-added pricing, competition-based pricing, and break-even analysis/target profit pricing. Internal factors like product costs and external factors like competitors' strategies also influence pricing decisions. The document outlines different pricing strategies companies use for new products, product mixes, and adjusting prices.
Pricing understanding and capturing customer value.pdfDrMoizAkhtar
This document discusses pricing strategies and considerations. It defines price as the amount charged for a product or service. Major pricing strategies discussed include customer value-based pricing, cost-based pricing, good-value pricing, value-added pricing, competition-based pricing, and market skimming versus market penetration pricing for new products. Both internal factors like costs and external factors like competitors' prices and customer perceptions must be considered when setting prices.
The document discusses different pricing strategies and concepts for establishing the value of a product. It describes value-based pricing, where the price is set at the perceived value to the customer. It also covers cost-based pricing, where the price is calculated by adding manufacturing costs and a percentage of profit. Additionally, it discusses market-based pricing, which establishes price based on existing market conditions, and competitor-based pricing, where the price is set based on what competitors charge. The key factors in determining pricing decisions and different pricing strategies for new products are also outlined.
This document discusses developing pricing strategies and programs. It outlines a six-step process for setting prices: 1) selecting a pricing objective, 2) determining demand, 3) estimating costs, 4) analyzing competitors, 5) selecting a pricing method, and 6) adjusting prices over time. Pricing objectives include maximizing profits, market share, or market skimming. Demand is estimated using factors like price sensitivity, elasticity, and demand curves. Costs include fixed and variable costs. Competitors' prices and value offerings are also analyzed. Common pricing methods are mark-up, target-return, perceived-value, value, and going-rate pricing. Prices may be initiated or responded to over time.
The document discusses developing pricing strategy and provides information on:
- Factors that influence pricing like costs, demand, competition
- Common pricing mistakes like not adjusting for market changes
- Consumer psychology related to pricing like reference prices
- Methods for setting prices like cost-based, demand-based, competition-oriented pricing
- Steps in setting price which include selecting objectives, determining demand, analyzing costs and competition
This document discusses various pricing strategies and considerations for setting prices, including:
1) Cost-based pricing which sets prices based on costs plus profit margin, and value-based pricing which sets prices based on customer perceptions of value.
2) Other pricing strategies like competition-based pricing, market-skimming for new products, and segmented pricing which charges different prices to different customer groups.
3) Ways to adjust prices like discounts, promotions, and geographical price variations based on location of customers.
The document discusses various considerations and approaches for setting prices, including:
1) Internal factors like marketing objectives, costs, and desired positioning affect pricing decisions. External factors like demand, competitors' prices, and customer perceptions also influence prices.
2) There are different pricing strategies such as value-based pricing, cost-based pricing, penetration pricing, and product-mix pricing. Companies also adjust prices using strategies like discounts, segmented pricing, and promotional pricing.
3) Setting the right price depends on analyzing the demand curve and price elasticity, as well as studying competitors' offerings. Companies aim to find the optimal price between the ceiling and floor.
This document discusses various strategies and considerations for setting prices, including:
1. Companies first determine their pricing objective such as survival, maximum profit, market share, or quality leadership. They then estimate demand curves and price sensitivity.
2. Common pricing methods include markup pricing, target-return pricing, and perceived-value pricing. Companies also consider competitors' costs and prices.
3. In selecting the final price, companies evaluate the impact of other marketing activities, their own pricing policies, and how the price might affect other parties. Gaining customer loyalty through value pricing is also discussed.
This document summarizes different pricing strategies and considerations discussed in Chapter 11 of the textbook "Principles of Marketing" by Kotler and Armstrong. It outlines new product pricing strategies like market-skimming and market-penetration pricing. It also discusses product mix pricing strategies, price adjustment strategies, factors that influence price changes, and public policy considerations related to pricing.
The document discusses pricing strategies, methods, and tactics. It provides an overview of how economists, accountants, customers, and marketers view price. Key factors that affect price are discussed such as costs, competition, demand, and objectives. Common pricing methods include market-based pricing using customer value and competitors' prices, and cost-based pricing using full costs, markups, and contributions. Pricing strategies aim to achieve objectives over the medium-long term and include skimming, penetration, leadership, and discrimination. Tactics are short term and include loss leaders, wars, and promotions. Demand elasticity measures responsiveness to price changes.
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2. Factors Affecting Price Decisions
Internal Factors External Factors
Nature of the market
Marketing Objectives Pricing and demand
Marketing Mix Strategy
Costs
Decisions Competition
Other environmental
Organizational
factors (economy,
considerations
resellers, government)
3. Internal Factors Affecting Pricing
Decisions: Marketing Objectives
Survival
Low Prices to Cover Variable Costs and
Some Fixed Costs to Stay in Business.
Current Profit Maximization
Choose the Price that Produces the
Marketing Maximum Current Profit, Etc.
Objectives Market Share Leadership
Low as Possible Prices to Become
the Market Share Leader.
Product Quality Leadership
High Prices to Cover Higher
Performance Quality and R & D.
4. Internal Factors Affecting Pricing
Decisions: Marketing Mix
Product Design
Non price Price Distribution
Positions
Promotion
5. External Factors
Affecting Pricing Decisions
Market and
Demand
Competitors’ Costs,
Prices, and Offers
Other External Factors
Economic Conditions
Reseller Needs
Government Actions
Social Concerns
6. Market and Demand Factors
Affecting Pricing Decisions
Pricing in Different Types of Markets
Pure Competition
Many Buyers and Sellers Pure Monopoly
Who Have Little Single Seller
Effect on the Price
Monopolistic Oligopolistic
Competition Competition
Many Buyers and Sellers Few Sellers Who Are
Who Trade Over a Sensitive to Each Other’s
Range of Prices Pricing/ Marketing
Strategies
9. Cost-Based Pricing
Certainty About
Costs
Simplest
Ethical
Cost-Plus
Factors Pricing
Pricing is Pricing is an
Situational Method
Simplified
Approach That
Unexpected
Adds a
Price Competition Standard
Is Minimized Attitudes
Markup to the Ignores
Costof the
of Current
Others Demand &
Product.
Much Fairer to Competition
Buyers & Sellers
10. Cost-Based Versus Value-Based Pricing
Cost-Based Pricing Value-Based Pricing
Product Customer
Cost Value
Price Price
Value Cost
Customers Product
11. Competition-Based Pricing
Setting Prices
Going-Rate
Company Sets Prices Based on What
Competitors Are Charging.
? Sealed-Bid
?
Company Sets Prices Based on
What They Think Competitors
Will Charge.
12. New Product Pricing Strategies
Market Skimming • Use Under These
Conditions:
Setting a High Price for a – Product’s Quality and
New Product to “Skim” Image Must Support Its
Maximum Revenues from Higher Price.
the Target Market. – Costs Can’t be so High that
They Cancel the
Results in Fewer, But Advantage of Charging
More Profitable Sales. More.
– Competitors Shouldn’t be
Able to Enter Market Easily
and Undercut the High
Price.
13. New Product Pricing Strategies
• Use Under These Market Penetration
Conditions:
– Market Must be Highly Setting a Low Price for a
Price-Sensitive so a Low New Product in Order to
Price Produces More “Penetrate” the Market
Market Growth. Quickly and Deeply.
– Production/ Distribution
Costs Must Fall as Sales Attract a Large Number of
Volume Increases. Buyers and Win a Larger
– Must Keep Out Market Share.
Competition & Maintain Its
Low Price Position or
Benefits May Only be
Temporary.
14. Product Mix-Pricing Strategies:
Product Line Pricing
• Involves setting price
steps between various
products in a product
line based on:
– Cost differences between
products,
– Customer evaluations of
different features, and
– competitors’ prices.
15. Product Mix- Pricing Strategies
• Optional-Product
– Pricing optional or
accessory products sold
with the main product.
i.e camera bag.
• Captive-Product
– Pricing products that
must be used with the
main product. i.e. film.
16. Product Mix- Pricing Strategies
• By-Product • Product-Bundling
– Pricing low-value – Combining several
by-products to get products and
rid of them & make offering the bundle
the main product’s at a reduced price.
price more – i.e. theater season
competitive. tickets.
– i.e. sawdust,
17. Discount and Allowance Pricing
A d ju s tin g B a s ic P r ic e to R e w a r d C u s to m e r s
F o r C e rta in R e s p o n s e s
C a s h D is c o u n t S e a s o n a l D is c o u n t
Q u a n tity D is c o u n t T r a d e -In A llo w a n c e
F u n c tio n a l D is c o u n t P r o m o t io n a l A ll o w a n c e
18. Psychological Pricing
• Considers the psychology of
prices and not simply the
economics.
• Customers use price less
when they can judge quality
of a product.
• Price becomes an important
Valu
e $2 quality signal when
2. 00
Sale customers can’t judge
$14
. 99 quality; price is used to say
something about a product.
19. Promotional Pricing
Loss Leaders Temporarily Pricing
Products Below List
Special-Event Pricing Price to Increase
Short-Term Sales
Cash Rebates Through:
Low-Interest Financing
Longer Warranties
Free Merchandise
Discounts
Editor's Notes
Internal Factors - When setting price, marketers must take into consideration several factors which are the result of company decisions and actions. To a large extent these factors are controllable by the company and, if necessary, can be altered. However, while the organization may have control over these factors making a quick change is not always realistic. For instance, product pricing may depend heavily on the productivity of a manufacturing facility (e.g., how much can be produced within a certain period of time). The marketer knows that increasing productivity can reduce the cost of producing each product and thus allow the marketer to potentially lower the product’s price. But increasing productivity may require major changes at the manufacturing facility that will take time (not to mention be costly) and will not translate into lower price products for a considerable period of time. External Factors - There are a number of influencing factors which are not controlled by the company but will impact pricing decisions. Understanding these factors requires the marketer conduct research to monitor what is happening in each market the company serves since the effect of these factors can vary by market
Return on Investment (ROI) – A firm may set as a marketing objective the requirement that all products attain a certain percentage return on the organization’s spending on marketing the product. This level of return along with an estimate of sales will help determine appropriate pricing levels needed to meet the ROI objective. Cash Flow – Firms may seek to set prices at a level that will insure that sales revenue will at least cover product production and marketing costs. This is most likely to occur with new products where the organizational objectives allow a new product to simply meet its expenses while efforts are made to establish the product in the market. This objective allows the marketer to worry less about product profitability and instead directs energies to building a market for the product. Market Share – The pricing decision may be important when the firm has an objective of gaining a hold in a new market or retaining a certain percent of an existing market. For new products under this objective the price is set artificially low in order to capture a sizeable portion of the market and will be increased as the product becomes more accepted by the target market (we will discuss this marketing strategy in further detail in our next tutorial). For existing products, firms may use price decisions to insure they retain market share in instances where there is a high level of market competition and competitors who are willing to compete on price. Maximize Profits – Older products that appeal to a market that is no longer growing may have a company objective requiring the price be set at a level that optimizes profits. This is often the case when the marketer has little incentive to introduce improvements to the product (e.g., demand for product is declining) and will continue to sell the same product at a price premium for as long as some in the market is willing to buy.
It should be noted that not all companies view price as a key selling feature. Some firms, for example those seeking to be viewed as market leaders in product quality, will deemphasize price and concentrate on a strategy that highlights non-price benefits (e.g., quality, durability, service, etc.). Such non-price competition can help the company avoid potential price wars that often break out between competitive firms that follow a market share objective and use price as a key selling feature.
Marketers must be aware of regulations that impact how price is set in the markets in which their products are sold. These regulations are primarily government enacted meaning that there may be legal ramifications if the rules are not followed. Price regulations can come from any level of government and vary widely in their requirements. For instance, in some industries, government regulation may set price ceilings (how high price may be set) while in other industries there may be price floors (how low price may be set). Additional areas of potential regulation include: deceptive pricing, price discrimination, predatory pricing and price fixing. Finally, when selling beyond their home market, marketers must recognize that local regulations may make pricing decisions different for each market. This is particularly a concern when selling to international markets where failure to consider regulations can lead to severe penalties. Consequently marketers must have a clear understanding of regulations in each market they serve.
Marketers should never rest on their marketing decisions. They must continually use market research and their own judgment to determine whether marketing decisions need to be adjusted. When it comes to adjusting price, the marketer must understand what effect a change in price is likely to have on target market demand for a product. Understanding how price changes impact the market requires the marketer have a firm understanding of the concept economists call elasticity of demand, which relates to how purchase quantity changes as prices change. Elasticity is evaluated under the assumption that no other changes are being made (i.e., “all things being equal”) and only price is adjusted. The logic is to see how price by itself will affect overall demand. Obviously, the chance of nothing else changing in the market but the price of one product is often unrealistic. For example, competitors may react to the marketer’s price change by changing the price on their product. Despite this, elasticity analysis does serve as a useful tool for estimating market reaction. Elasticity deals with three types of demand scenarios: Elastic Demand – Products are considered to exist in a market that exhibits elastic demand when a certain percentage change in price results in a larger and opposite percentage change in demand. For example, if the price of a product increases (decreases) by 10%, the demand for the product is likely to decline (rise) by greater than 10%. Inelastic Demand – Products are considered to exist in an inelastic market when a certain percentage change in price results in a smaller and opposite percentage change in demand. For example, if the price of a product increases (decreases) by 10%, the demand for the product is likely to decline (rise) by less than 10%. Unitary Demand – This demand occurs when a percentage change in price results in an equal and opposite percentage change in demand. For example, if the price of a product increases (decreases) by 10%, the demand for the product is likely to decline (rise) by 10%. For marketers the important issue with elasticity of demand is to understand how it impacts company revenue. In general the following scenarios apply to making price changes for a given type of market demand: For elastic markets – increasing price lowers total revenue while decreasing price increases total revenue. For inelastic markets – increasing price raises total revenue while decreasing price lowers total revenue. For unitary markets – there is no change in revenue when price is changed.
External Factors: Customer Expectations Possibly the most obvious external factors that influence price setting are the expectations of customers and channel partners. As we discussed, when it comes to making a purchase decision customers assess the overall “value” of a product much more than they assess the price. When deciding on a price marketers need to conduct customer research to determine what “price points” are acceptable. Pricing beyond these price points could discourage customers from purchasing. Firms within the marketer’s channels of distribution also must be considered when determining price. Distribution partners expect to receive financial compensation for their efforts, which usually means they will receive a percentage of the final selling price. This percentage or margin between what they pay the marketer to acquire the product and the price they charge their customers must be sufficient for the distributor to cover their costs and also earn a desired profit.