Topic 6: Pricing

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Topic 6 Pricing

• Principles of Marketing Management
• Entrepreneurial Focus

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Pricing Strategy Dimensions

• Price_________________
• EDLP HiLo
• Price promotion____________
• Price/promotion____________
• Price level

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Some definitions

• _____________________
• Charging different prices for the same product
• _____________________
• Selling a product in a foreign country for less
  than the marginal cost of production

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____________________
Stimulate sales
Price Competition
Increase store traffic
Lower risk to channel
Customer Needs
Consumer satisfaction
Adjust for supply demand variations
5
_______________________
No price wars Stable reference price Builds brand
loyalty Maintains quality perception
Product Competition
Customer Needs
Distribution Competition
Promotion Competition
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Factors Affecting Price

• ____________
• Company objectives
• Pricing objectives
• Costs
• Other marketing mix variables

• _______________
• Channel members
• Customers
• Competition
• Legal Regulatory

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Stages for Price Determination

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Pricing Objectives
___________________________ and Typical Actions
Taken to Achieve Them
Survival Adjust price levels so that the firm
can increase sales volume to match
organizational expenses Profit Identify price
and cost levels that allow firm to maximize
profit (Skimming) Return on investment Identify
price levels that enable firm to yield
targeted ROI Market share Adjust price levels
so that firm can maintain or increase sales
relative to competitors sales (Penetration) Pr
oduct quality Set prices to recover research and
development expenses and establish
high-quality image (Prestige pricing) Deter
competition Low to discourage competitors from
entering market near competitors to
discourage price wars
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Price Information

• Perceived value
• Buyers overall assessment of a products utility

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Customers Interpretation

• Internal ________________
• External _______________
• ______________ price
• _____________ of future prices
• Last paid price
• Perception of the ______________ of the producer
  or reseller

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Inelastic and Elastic Demands
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Analysis of ___________

• Fixed costs
• Variable costs
• Total cost
• Total revenue
• Profits

13
____________________

• Mark-up
• Of cost
• Of price
• Target return pricing
• Income-based pricing
• Price sensitivity measurement
• Value in use

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Pricing Strategies

• ________________
• Secondary market
• Periodic discounting
• Random discounting
• Price skimming
• Off-peak pricing
• Loss leaders

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Pricing Strategies

• _________________
• Penetration pricing
• Limit pricing
• Price signaling
• Going rate
• Captive pricing
• Premium pricing
• Bait pricing

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Pricing Strategies

• ________________
• Reference pricing
• Every day low price
• Odd-even
• Customary pricing
• Prestige or premium pricing

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Pricing Strategies

• ________________
• ________________
• Bundling
• Premium
• Partitioned Pricing

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_______________________

• Low-quality trap
• Fragile market trap
• Shallow pockets trap

• Direct price reductions
• Quantity discounts
• Rebates
• Bundling additional services/products but keeping
  the price the same

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Pricing for ________________ Markets

• Price discounting
• Geographic pricing
• Competitive bid
• Negotiated price

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________________________

• Overcharging
• Gouging
• Comparison
• Bait Switch
• Predatory pricing
• Unit pricing