1

DEVELOPING PRICING STRATEGIES AND

PROGRAMS

MM KuiAteneo Graduate School of Business

Top 10 Concepts

Visual Edition

Outline: Pricing…

1. Must be integral in marketing mix (why?)

2. Involves both buyers and sellers (how?)

3. Changing / Dynamic (how?)4. Derived from company’s objectives

(what?) 5. Should consider competitors (why?)

6. Employs several methods (what?)

7. Isn’t just about “lowest price” (why?)

8. Differentiation responds to differing needs (how?)

9. Can be boosted by advertising (how?)

10.Must be increased carefully (how?)

Outline: Pricing…

Price

Concept 1:

Pricing is an integral part of the marketing mix

Price

Concept 2:

Buyers are not just “price takers”, understand Consumer Pricing Psychology

Consumer Pricing

Psychology

Price

Concept 3:

Pricing is dynamic and must always respond to the times

Consumer Pricing

PsychologyCompany

Competitor

Dynamic

Price

Concept 4:

A clear objective is essential for pricing decisions

Consumer Pricing

PsychologyCompany

Competitor

Dynamic

Objective

Price

Concept 5:

Base your price on your competitors’, and anticipate a response

Consumer Pricing

PsychologyCompany

Competitor

Dynamic

Objective

Competitor response

Price

Concept 6:

Employ differing methods

Consumer Pricing

PsychologyCompany

Competitor

Dynamic

Objective

Competitor response

Differing methods

Price

Concept 7:

Pricing is not always about “lowest price”

Consumer Pricing

PsychologyCompany

Competitor

Dynamic

Objective

Competitor response

Differing methods

Sale away profits and

clients

Price

Concept 8:

Price differentiation is a useful tool

Consumer Pricing

PsychologyCompany

Competitor

Dynamic

Objective

Competitor response

Differing methods

Sale away profits and

clients

Differentiate

Price

Concept 9:

Advertising allows a product to boost its price

Consumer Pricing

PsychologyCompany

Competitor

Dynamic

Objective

Competitor response

Differing methods

Sale away profits and

clients

Differentiate

Ads

Price

Concept 10:

Price increases must not alienate customers

Consumer Pricing

PsychologyCompany

Competitor

Dynamic

Objective

Competitor response

Differing methods

Sale away profits and

clients

Differentiate

Ads

Increase price

carefully!

Summary: Pricing…

1. Signals a brand’s position in the market

2. Is also dictated by the buyers

3. Is changing / dynamic

4. Is easier with a clear objective

5. Influences competitors

6. Employs several methods

7. Should not be all about “lowest price”

8. Differentiation responds to differing client needs

9. Can be boosted by advertising

10.Must be increased without offending customers

Summary: Pricing…

My Conclusion: Pricing should be the foremost concern, as it:• reflects a product’s position

• influences buyer choices

• initiates responses from competitors, and

• Impacts bottom-line income

17

DEVELOPING PRICING STRATEGIES AND

PROGRAMS

MM KuiAteneo Graduate School of Business

Top 10 Concepts

Visual Edition