08. pricing strategy

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Pricing strategy by Tharaka Dias

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08. pricing strategy

  1. 1. THARAKA DIAS MBA(USA), BBA(USA), Dip in Mgt, ACIM(UK),FAEA(Dip in AEA-UK), FinstSMM(UK), CPM(Asia), MSLIM
  2. 2. 1. Number of potential buyers; their age, gender and education2. Location of potential buyers3. Position of potential buyers4. Expected consumption of potential buyers5. Economic strength of potential buyers AOT - www.tharakadias.com 2
  3. 3. 1. Will potential buyers use price as an indicator of quality?2. Will potential buyers be favorably attracted by odd pricing?3. Would potential buyers perceive price as too high relative to the service product gives?4. Are potential buyers prestige oriented and willing to pay a premium to fill this need?5. How much will potential buyers be willing to pay for the product? AOT - www.tharakadias.com 3
  4. 4. 1. Pricing to achieve a target return on investment2. Stabilization of price and margin3. Pricing to achieve a target market share4. Pricing to meet or preventcompetition AOT - www.tharakadias.com 4
  5. 5. Markup pricing – percentage is added to theretailer’s invoice to determine final priceCost-plus pricing – costs of producing aproduct plus desired profit are added toachieve priceRate-of-return or target pricing – price isdetermined by adding desired rate of returnon investment to total costs AOT - www.tharakadias.com 5
  6. 6. 1. Perishability – must be priced to sell without costly delays; includes fruit to high fashion2. Distinctiveness – homogeneous goods have easy substitutes and make distinguishing between competitors difficult3. Life Cycle – • Skimming policy is when seller charges a high price on a new product. • Penetration policy is when producer charges a low price for a new product. AOT - www.tharakadias.com 6
  7. 7. Factors Affecting PriceOrganizationaland Marketing Objectives Pricing Decisions AOT - www.tharakadias.com 7
  8. 8. Factors Affecting PriceOrganizational Types ofand Marketing Pricing Objectives Objectives Pricing Decisions AOT - www.tharakadias.com 8
  9. 9. Factors Affecting PriceOrganizational Types ofand Marketing Pricing Costs Objectives Objectives Pricing Decisions AOT - www.tharakadias.com 9
  10. 10. Factors Affecting PriceOrganizational Types of Other Marketingand Marketing Pricing Costs Mix Variables Objectives Objectives Pricing Decisions AOT - www.tharakadias.com 10
  11. 11. Factors Affecting PriceOrganizational Types of Other Marketingand Marketing Pricing Costs Mix Variables Objectives Objectives Pricing Decisions Channel Member Expectations AOT - www.tharakadias.com 11
  12. 12. Factors Affecting PriceOrganizational Types of Other Marketingand Marketing Pricing Costs Mix Variables Objectives Objectives Pricing Decisions Channel Customers Member Interpretation Expectations and Response AOT - www.tharakadias.com 12
  13. 13. • Internal Reference Price• External Reference Price• Value-Conscious• Price-Conscious• Prestige-Sensitive AOT - www.tharakadias.com 13
  14. 14. Factors Affecting PriceOrganizational Types of Other Marketingand Marketing Pricing Costs Mix Variables Objectives Objectives Pricing Decisions Channel Customers Member Interpretation Competition Expectations and Response AOT - www.tharakadias.com 14
  15. 15. Factors Affecting PriceOrganizational Types of Other Marketingand Marketing Pricing Costs Mix Variables Objectives Objectives Pricing Decisions Channel Customers Legal and Member Interpretation Competition Regulatory Expectations and Response Issues AOT - www.tharakadias.com 15
  16. 16. 1. Number of competitors2. Size of competitors3. Location of competitors4. Conditions of entry into the industry5. Number of products sold by competitors6. Cost structure of competitors7. Historical reaction of competitors to price changes AOT - www.tharakadias.com 16
  17. 17. Thank youAOT - www.tharakadias.com 17

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