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Chatper 11 The Pricing Strategy


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Chatper 11 The Pricing Strategy

  1. 1. The Price Strategy Chapter 11
  2. 2. Factors Affecting Price• Costs and Expenses• Supply and Demand• Consumer Perceptions• Competition• Government Regulations• Technological Trends
  3. 3. Pricing Objectives• Goals that tell what a marketer wants to achieve through pricing.
  4. 4. Return on Marketing Investment (ROMI)• Ratio that tells a business how much it earned as a percentage of the investment it made to earn the money.
  5. 5. Price-Fixing• Situation in which a group of competitors gets together and sets (fixes) the price for a specific product; they then all agree to sell that product for the same price.
  6. 6. Price Discrimination• Situation in which a company plays favorites by charging lower prices to some companies for the same products.
  7. 7. Price Channels RetailerManufacturer Wholesaler Consumer
  8. 8. Pricing Techniques
  9. 9. Psychological Pricing• Set of pricing techniques used to create an image of a product to entice customers to buy.
  10. 10. Discount Pricing• Business that sell to other businesses often use discount pricing.• Discount pricing offers a reduction from the regular or list price of a product.
  11. 11. Cash Discount• A reduction in price is offered to retailers who pay their bills promptly. (B2B)
  12. 12. Promotional Pricing• A discount is given in exchange for the customers promoting the product. (B2B)
  13. 13. Quantity Discount or Bundle Pricing• A discount is given for a large order. (B2B)
  14. 14. Prestige Pricing• A technique used in which higher-than- average prices are used to suggest status and prestige to the customer.
  15. 15. Seasonal Discount• A discount is given when a retailer buys in advance of the season. (B2B)
  16. 16. Calculating Prices
  17. 17. List Price• Established price of a product as published in a catalog or on a price tag.
  18. 18. Market Price• Actual price you pay for a product, after any discounts or coupons are deducted.
  19. 19. MSRP• The retail price that the manufacturer recommends.
  20. 20. Unit Pricing• Displaying the price of an item based on a standard unit of measure, such as an ounce or a pound.