Chap014

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Chap014

  1. 1. 14<br />Managing Pricing Decisions<br />Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved<br />McGraw-Hill/Irwin<br />
  2. 2. LEARNING OBJECTIVES<br />Understand the integral role of price as a core component of value<br />Explore different pricing objectives and related strategies<br />Identify pricing tactics <br />Describe approaches to setting the exact price<br />Determine discounts and allowances to offer to channel members <br />Understand how to execute price changes <br />Examine legal considerations in pricing<br />14-2<br />
  3. 3. PRICE IS A CORE COMPONENT OF VALUE<br />Value is a ratio of the bundle of benefits a customer receives from an offering compared to the costs incurred by the customer in acquiring that bundle of benefits.<br />Price – or more specifically the customer’s perception of the offering’s pricing – is a key determinant of perceived value.<br />14-3<br />
  4. 4. Elements of Managing Pricing Decisions<br />EXHIBIT 14.1<br />Establish Pricing Objectives and Related Strategies<br />Select Pricing <br />Tactics<br />Set the Exact <br />Price<br />Determine Channel<br />Discounts and Allowances<br />Execute Price<br />Changes<br />Understand Legal Considerations in Pricing<br />14-4<br />
  5. 5. ESTABLISH PRICING OBJECTIVES AND RELATED STRATEGIES<br />Pricing objectives are the desired or expected result associated with a pricing strategy.<br />Pricing objectives must be consistent with other marketing-related objectives as well as with the firm’s overall objectives for doing business.<br />14-5<br />
  6. 6. ESTABLISH PRICING OBJECTIVES AND RELATED STRATEGIES<br />Penetration Pricing<br />Price Skimming<br />14-6<br />
  7. 7. ESTABLISH PRICING OBJECTIVES AND RELATED STRATEGIES<br />Profit Maximization and Target ROI<br />Price Elasticity Of Demand<br />Competitor-Based Pricing<br />Price war<br />Stability pricing<br />14-7<br />
  8. 8. ESTABLISH PRICING OBJECTIVES AND RELATED STRATEGIES<br />Value Pricing<br />Value pricing overtly attempts to take into account the role of price as it reflects the bundle of benefits sought by the customer.<br />14-8<br />
  9. 9. Generic Price-Quality Positioning Map<br />EXHIBIT 14.3 <br />High Price<br />Feasible<br />Positions<br />Feasible<br />Positions<br />Low Quality<br />High Quality<br />Feasible<br />Positions<br />Low Price<br />14-9<br />
  10. 10. summary of tactical pricing approaches<br />EXHIBIT 14.4<br />Product<br />Line Pricing<br />Captive<br />Pricing<br />Auction Pricing<br />Price Bundling<br />EDLP and High/Low Pricing<br />Pricing<br />Tactics<br />One-Price and Variable Pricing<br />Reference Pricing<br />Odd/Even Pricing<br />Prestige Pricing<br />14-10<br />
  11. 11. SELECT PRICING TACTICS<br />Product Line Pricing<br />Price points <br />Captive Pricing<br />Complementary pricing<br />Price Bundling<br />Reference Pricing<br />Prestige Pricing<br />Odd/Even Pricing<br />14-11<br />
  12. 12. SELECT PRICING TACTICS<br />One-Price Strategy and Variable Pricing<br />Everyday Low Pricing (EDLP) and High/Low Pricing<br />Auction Pricing<br />14-12<br />
  13. 13. SET THE EXACT PRICE<br />14-13<br />
  14. 14. DETERMINE CHANNEL DISCOUNTS AND ALLOWANCES<br />Discounts are direct, immediate reductions in price provided to purchasers. <br />Allowances remit monies to purchasers after the fact. <br />14-14<br />
  15. 15. DETERMINE CHANNEL DISCOUNTS AND ALLOWANCES<br />14-15<br />
  16. 16. DETERMINE CHANNEL DISCOUNTS AND ALLOWANCES<br />Geographic Aspects of Pricing<br />14-16<br />
  17. 17. EXECUTE PRICE CHANGES<br />A change in an offering’s price – either up or down – can dramatically impact the effectiveness of the overall marketing mix variables in reflecting your offering’s positioning in the eyes of customers. <br />Just Noticeable Difference (JND) <br />14-17<br />
  18. 18. UNDERSTAND LEGAL CONSIDERATIONS IN PRICING<br />14-18<br />
  19. 19. Thank You, Please Visit Us At :<br />http://wanbk.page.tl<br />

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