Final Industrial Pricing Strategy

8/9/2019 Final Industrial Pricing Strategy

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Name Roll No.

Nitin Mahalley 50Deboshree Majumdar 51

Chetan Medpalliwar 54

Ashish Nakade 62&

Prof. Deepak Bhattacharya

GROUP MEMBERS


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y Introduction to the Concept

y Methods of Pricing

y Types of Strategies


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Video


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INTRODUCTION OF THE CONCEPT


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Price has a special significance mainly for three reasons:

y Revenue Generator- It ultimately pays for all of a

firms activities.

y Determination Of Demand- Price is a competitivetool. It influences the quantity demanded.

y Price : A Key Factor In Marketing Mix- It has a closerelationship with other marketing mix variables.

SIGNIFICANCE OF PRICE


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Price&

Promotion

Price&

Product

Price&

Distribution

Positioning

ConvincingThe

CustomersConsumers

Persuading

Customers


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y Pricing is not independent

y Strategic and tactical

y Pricing is creative

y Pricing needs fairness

CHARACTERISTICS OF INDUSTRIAL

PRICES


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Industrial pricing V/s Consumer Pricing

GROUP DISCUSSION


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ASPECT INDUSTRIALPRICING

CONSUMERPRICING

List Price Besides price,discounts, delivery,installation andtraining areconsidered.

Price is the majordeterminant. Quiteoften, the list price.

Evaluation Based on firmsvalue chain andcompetitiveoffering

Based onsatisfaction andcompetitiveofferings.

CONSUMER V/S INDUSTRIALPRICING


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ASPECT INDUSTRIALPRICING

CONSUMERPRICING

Buyers Professionals.Members of buyingcenter can extractvalue for money.

Individuals. Lesscapable ofextracting value formoney.

Bargaining Competitivebidding andnegotiation.

Auctions andHaggling.

CONSUMER V/S INDUSTRIALPRICING


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B2C B2BProduct driven Relationship driven

Maximize the value of the transaction Maximize the value of the relationship

Large target market Small, focused target market

Single step buying process, shorter sales cycle Multi-step buying process, longer sales cycle

Brand identity created through repetition andimagery

Brand identity created on personal relationship

Merchandising and point of purchase activities Educational and awareness building activities

Emotional buying decision based on status, desire,or price

Rational buying decision based on business value

IN GENERAL TERMS. . . . . . .


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Setting the price for a new product or changing the price for anexisting product involves the consideration of several Internaland External Factors

y INTERNAL FACTORS

Costs, Product line, Marketing strategy and Managementjudgment.

y EXTERNAL FACTORS

Demand, Competition, Channels, Product life cycle,Economic conditions and Political- legal system.

FACTORS INFLUENCING PRICINGDECISIONS


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y Cost

y Product line

y Marketing objectives and strategy

y Managements judgment

INTERNAL FACTORS


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y Demand

y Product-life cycle

y Channel factor

y Economic conditions and Political-legal factors

y Competition (Monopoly, Oligopoly, Monopolistic)

EXTERNAL FACTORS


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Selecting thepricing

objectives

Determining

the demand

Estimating

costs

Analyzingcompetition

Selecting apricingmethod

Fixing thefinal price

STEPS IN SETTING PRICES


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SITUATION OBJECTIVES

Over capacity, intense competition,changing customer wants

SURVIVAL

Market fluctuations many, intensecompetition

PRICE STABILIZATION

Product in maturity stage RETAIN MARKET SHARE

Product in decline stage MILCH THE COW: GAINMAXIMUM BENEFITBEFORE DROPPING

Pricing situations and objectives


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objectives

Determining

the demand

Estimating

costs






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y There are many pricing methods in relation to the basicconsiderations under different pricing situations.

PRICING FRAMEWORKSITUATION MAJOR

FACTORSAPPROACH METHOD

New productintroduction

Demand: Elastic,Inelastic

Cost-oriented,Demand-

oriented

Cost-plus ormark up,

Skimming,Penetration

Mature markets,Stiff competition

Competition Competitionoriented

Price leadership,Competitivebidding

Selecting a pricing method


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objectives

Determining

the demand

Estimating

costs






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BORED ???


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Wake Up Sid

Provogue

Aisha

L'Oreal

Lafangey Parindey

Pulsar 220 DTS

Ghajini

Louis Philippe

BRANDS THAT SPONSORED INTHESE MOVIES?


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BRANDS THAT YOU THINK OF FORTHESE CELEBS?


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y Katrina Kaif

y AamirKhan

y Aishwarya Rai Bachchan

y

RanbirK

apoor


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Come fall in love all over again

DDLJ

We the people Swades

Dont be cupid

Aisha

Sometimes winning is everything

Chak De India

GUESS THE MOVIE ?


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One city. Countless emotions Life In A Metro

Once upon a time in India

Lagaan

A generation awakens

Rang De Basanti

So when do you know its love ?

Jaane Tu Ya Jaane Na


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Pricing methods

Cost basedMethods

CompetitionBased

Methods

DemandBased

Methods


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y Cost plus Method:

Popularly employed by Construction companies,Consultants, and Doctors

y Marginal Cost Pricing:

For companies wants to introduce newproduct

y

Experience Curve Pricing:For existing Companies

Cost based Methods


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y Trade Association pricing:

For firms makes agreements to maintainprices at a similar level

y Price leadership:

For the firms whose production cost is low andthey dominate the industry

y

Competitive bidding:Bid win contract

Competition Based


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y Perceived value Analysis:Value for money

Direct price method:Value of a product as a whole is perceived

Direct percived value rating method:Buyers are asked to assign value ratings

Diagnostic method:Buyers Compare the products in competition

Demand Based Price


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y Price Discrimination:

Selling the same or slightly differentiated productto differentiated product to different sections of

consumer at different prices


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y List and Net price

y Rebates

yAllowances

y Discounts

Flexible Pricing


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y Product Mix Pricing Strategies

y Product life Cycle Strategies

y Technology Adoption Cycle Pricing Strategiesy Business Cycles

y Government

y Competitive Strategies

TYPES OF PRICING STRATEGIES


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PRODUCT LIFE CYCLE PRICING

STRATEGIES

Pe etrati i i

PerceivedValues

C petitive


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RolePlay


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Low sales, high cost per customer, few competitors

Stage - Introduction

Pricing Policy - Skimming


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Rapidly raising sales, moderate costs,

growing competition

Stage - Growth

Pricing Policy - Promotion/Penetration Pricing


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Peak sales, low costs, stable competition

Stage - Maturity

Pricing Policy Competitive Pricing


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Falling sales, low costs, declining competition

Stage - Decline

Pricing Policy - Price Cutting


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PRODUCT-MIX PRICING STRATEGIES

Product Line

Pricing

OptionalFeaturePricing

CaptiveProductPricing

Two Part

Pricing

By Product

Pricing

ProductBundlingPricing


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y Differet Products

y Pricing Products that differ in size

y Special Order Pricing

y

Pricing Complementary Products

Methods of Product Line Pricing

Product Line Pricing


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y Pricing repair parts / spare parts

y Products like two wheelers or four wheelers need spare

parts and servicingy To induce purchase, the marketer may price the parts

high and keep captive prices low or vice-versa.

Captive Product Pricing


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y To attract buyers, marketers offer optional productfeatures and services along with the main product.An economy buyer can go for no frills model.

y

This is a form of captive pricing used in case ofservices. The price of the service is broken into twoparts fixed charges & variable charges based onusage rate.

Optional Feature Pricing

Two Part Pricing


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y Companies search for uses of the by-product & tryto sell them at a price that recovers the cost ofstoring & delivering it to buyer.

y This Practice will help lower the price of the main

product and make it more competitive.

y A group of products is sold at a price lower thanthe total of the price of the individual products.

y The difference provides an incentive to buy thebundle rather than the individual product.

Product Bundling Pricing

By-Product Pricing


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COMPANY THAT UNDERTOOK

THESE PROJECTS ?


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Punch Lines of the Companies


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Your Right Partner

Standard Chartered Bank

Where Do You Want to Go Today ; Your PotentialOur Passion

Microsoft

The Heart of Asia

Cathy Pacific Airlines

For a Special Journey called Life

Chevrolet


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Pure for sure

BPCL

Ban jaaye baat

CompaqTouch The Perfection

TOYOTA

Growth is Life

Reliance industries Limited


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Its all about imangineeering

L&T

Tyres With Muscle

MRF

Choose Freedom

TOSHIBA

Delighting You Always

Canon


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V

ideo


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Technology Adoption Cycle Pricing

Strategies:

Introduction Stage

Early Growth Stage

Rapid Growth Stage

Maturity

Decline


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Pricing Stragies Over B siness Cycle:

IncomeChanges Cost Changes

Price ofS bstit te

Changes in

General PriceLevel Market Share

Ind stry other

PriceDeterminants


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Pricing StrategyInfluenced ByGovernment

Administered

or RetensionPricing

D al Pricing


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Title: Pricing of an Innovative product

y Sol tion:

Introd ction

The problem

Ass mptionsPossible sol tion and their eval at tion

Selection of the best sol tion

Case Study


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ThankYou !!!

Final Industrial Pricing Strategy

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