This document discusses various pricing strategies and programs that a company can use to adapt prices based on changing circumstances and opportunities. It covers geographical pricing to account for location-based differences, forms of international trade involving bartering or offsets, the risks of overusing discounts, and types of promotional pricing like loss leaders, rebates, and financing. It also explains differential pricing approaches like discriminating prices for customer segments, product versions, channels, locations, seasons, or early vs. late purchases. The goal is to help companies set prices that meet varying needs.

1. DEVELOPING
PRICING
STRATEGIES
AND PROGRAMS
Presentation by Srujan Dasari

2. HOW
SHOULD A COMPANY ADAPTPRICES
TOMEET VARYING CIRCUMSTANCES
ANDOPPURTUNITIES ?

3. Geographical Pricing:
How to price to different customers at different locations?
Counter-trade(15~20%):Manybuyerswant to offer
other items inexchange.
Forms of World Trade:
• Barter
• Compensation Deal: some percentage in cash, rest inproducts
• Buyback arrangement: accept products manufacturedwith
supplied goods as partial payments
• Offset:receive full paymentincash but agreeto spend some amountinthe country

4. Price, Discounts and Allowances:
IfDISCOUNTINGbecomes the NORM,product valuecan be UNDERMINED
Some product categories self-destruct by always being on sale.
It can bea Mistake for strong, distinctive brand to plunge into price-discounting

5. Promotional Pricing:
1. Loss-leader pricing
2. Special event pricing
3. Special customer pricing
4. Cash rebates
5. Low-interest financing
6. Longer paymentterms
7. Warrantiesand
service contracts
8. Psychological discounting

6. DifferentialPricing:
Price discrimination: Company sells a product at two ormore places that donot reflect
a proportional difference incosts
1. Customer segment pricing: different customers pay different prices for same product
2. Product-formpricing: different versions priced differently, disproportionate to costs
3. Image pricing: chargedifferent prices based on image-differences
4. Channel pricing: price changewith changein supply-channel
5. Location pricing: different prices at different Locations.
6. Time pricing: prices variedby season.
7. Yield pricing: discounted early prices, higherlateprices

7. DISCLAIMER
Created by Srujan Dasari, IIT Kharagpur,
during an internship by
Prof. Sameer Mathur, IIM Lucknow.
www.IIMInternship.com