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Mrktg Price[1]


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Mrktg Price[1]

  1. 1. Price <ul><li>Price = </li></ul>Quantity of money by the seller Quantity of goods & services received by the buyer
  2. 2. Price Decisions PRICE GOVT. POLICY COMPETITOR REACTIONS COST <ul><li>BARRIERS IN INDUSTRY </li></ul><ul><li>Like Technology </li></ul><ul><li>Exit Barrier </li></ul>CORPORATE OBJECTIVE DEMAND
  3. 3. Pricing Methods <ul><li>Cost based pricing </li></ul><ul><li>Demand based pricing </li></ul><ul><li>Competition-oriented pricing </li></ul><ul><li>Different pricing </li></ul><ul><li>Going rate or “Follow the crowd” </li></ul>
  4. 4. <ul><li>Cost based pricing : </li></ul><ul><ul><ul><li>Pricing method in which the selling price of the product is fixed by adding a margin to the cost price. </li></ul></ul></ul><ul><ul><ul><li>Depending on the nature of products & market </li></ul></ul></ul><ul><ul><ul><li>The higher the value of the product the larger the mark-up & vice-versa. </li></ul></ul></ul><ul><li>Demand based pricing </li></ul><ul><ul><ul><li>What the traffic can bear pricing </li></ul></ul></ul><ul><ul><ul><li>Skimming pricing </li></ul></ul></ul><ul><ul><ul><li>Penetration pricing </li></ul></ul></ul>Pricing Methods (contd…)
  5. 5. <ul><li>Competition oriented pricing </li></ul><ul><ul><ul><li>Premium pricing </li></ul></ul></ul><ul><ul><ul><li>Discount pricing </li></ul></ul></ul><ul><ul><ul><li>Parity pricing / Going rate pricing </li></ul></ul></ul><ul><li>Differential Pricing </li></ul><ul><ul><ul><li>Charge different prices fir the same product in different area of market. </li></ul></ul></ul><ul><ul><ul><li>On the basis of customer class </li></ul></ul></ul><ul><ul><ul><li>Volume of purchase </li></ul></ul></ul>Pricing Methods (contd…)
  6. 6. <ul><li>Going rate or “Follow The Crowd” </li></ul><ul><ul><ul><li>The firm prices its product at the same level as that of the competition </li></ul></ul></ul><ul><ul><ul><li>Assume that there will be no price wars within the industry. </li></ul></ul></ul><ul><ul><ul><li>Not necessarily true that all firms or the leader firm is operating efficiently </li></ul></ul></ul><ul><ul><ul><li>In case it is not, it will mean that the follower firm will also adopt a price level which reflects leader’s inefficiency rather than the firm’s efficiency. </li></ul></ul></ul>Pricing Methods (contd…)
  7. 7. Price Wars LOW HIGH HIGH LOW Price Sensitivity Concern for Quality Value Added Marketing Maintain & Grow Consumer Education Quit
  8. 8. Value is opaque and Price is transparent !