Pricing
-
Upload
dexter-velez -
Category
Business
-
view
528 -
download
1
description
Transcript of Pricing
![Page 1: Pricing](https://reader036.fdocuments.in/reader036/viewer/2022070303/549388d6b47959f2108b47e2/html5/thumbnails/1.jpg)
PRICING
![Page 2: Pricing](https://reader036.fdocuments.in/reader036/viewer/2022070303/549388d6b47959f2108b47e2/html5/thumbnails/2.jpg)
What is Pricing?
Is the process of determining what a company will receive in exchange for its products.
![Page 3: Pricing](https://reader036.fdocuments.in/reader036/viewer/2022070303/549388d6b47959f2108b47e2/html5/thumbnails/3.jpg)
Two Views
Buyers’ View – For those making a purchase, such as final customers, price refers to what must be given up to obtain benefits.
Sellers’ View - To sellers in a transaction, price reflects the revenue generated for each product sold and, thus, is an important factor in determining profit.
![Page 4: Pricing](https://reader036.fdocuments.in/reader036/viewer/2022070303/549388d6b47959f2108b47e2/html5/thumbnails/4.jpg)
Common Questions
Are they getting their money’s worth?
Can they afford that certain product?
Can I have a discount?
Why is it so expensive?
![Page 5: Pricing](https://reader036.fdocuments.in/reader036/viewer/2022070303/549388d6b47959f2108b47e2/html5/thumbnails/5.jpg)
![Page 6: Pricing](https://reader036.fdocuments.in/reader036/viewer/2022070303/549388d6b47959f2108b47e2/html5/thumbnails/6.jpg)
What a Price should do!
• Achieve the financial goals of the company. (e.g., profitability)
• Fit the realities of the marketplace. (Will customers buy at that price?)
• Support a product's market positioning.
![Page 7: Pricing](https://reader036.fdocuments.in/reader036/viewer/2022070303/549388d6b47959f2108b47e2/html5/thumbnails/7.jpg)
Factors that affects Pricing
Cost Customer Competition Other Factors
•Supplier's prices
•Price inflation
•Exchange rate movements
• Quality
•Growth in customer's income
•Perception about future prices
•Quality perception
• Demand
•perfect competition
•Imperfect Competition
•Role of Middle Man
![Page 8: Pricing](https://reader036.fdocuments.in/reader036/viewer/2022070303/549388d6b47959f2108b47e2/html5/thumbnails/8.jpg)
Pricing Strategies
Penetration pricing
• Here the organization sets a low price to increase sales and market share. Once market share has been captured the firm may well then increase their price.
![Page 9: Pricing](https://reader036.fdocuments.in/reader036/viewer/2022070303/549388d6b47959f2108b47e2/html5/thumbnails/9.jpg)
Pricing Strategies
Skimming pricing
• The organization sets an initial high price and then slowly lowers the price to make the product available to a wider market. The objective is to skim profits of the market layer by layer.
![Page 10: Pricing](https://reader036.fdocuments.in/reader036/viewer/2022070303/549388d6b47959f2108b47e2/html5/thumbnails/10.jpg)
Pricing Strategies
Competition pricing
• Setting a price in comparison with competitors. Really a firm has three options and these are to price lower, price the same or price higher.
![Page 11: Pricing](https://reader036.fdocuments.in/reader036/viewer/2022070303/549388d6b47959f2108b47e2/html5/thumbnails/11.jpg)
Pricing Strategies
Product Line Pricing
• Pricing different products within the same product range at different price points.
![Page 12: Pricing](https://reader036.fdocuments.in/reader036/viewer/2022070303/549388d6b47959f2108b47e2/html5/thumbnails/12.jpg)
Pricing Strategies
Bundle Pricing
• The organization bundles a group of products at a reduced price.
![Page 13: Pricing](https://reader036.fdocuments.in/reader036/viewer/2022070303/549388d6b47959f2108b47e2/html5/thumbnails/13.jpg)
Pricing Strategies
Psychological pricing
• The seller here will consider the psychology of price and the positioning of price within the market place.
![Page 14: Pricing](https://reader036.fdocuments.in/reader036/viewer/2022070303/549388d6b47959f2108b47e2/html5/thumbnails/14.jpg)
Pricing Strategies
Premium pricing
• The price set is high to reflect the exclusiveness of the product.
![Page 15: Pricing](https://reader036.fdocuments.in/reader036/viewer/2022070303/549388d6b47959f2108b47e2/html5/thumbnails/15.jpg)
Pricing Strategies
Optional pricing
• The organization sells optional extras along with the product to maximize its turnover
![Page 16: Pricing](https://reader036.fdocuments.in/reader036/viewer/2022070303/549388d6b47959f2108b47e2/html5/thumbnails/16.jpg)
Basic Guidelines
• Your price must be enough higher than costs to cover reasonable variations in sales volume.
• You have to make a living.
• Your price should almost never be lower than your costs or higher than what most consumers consider "fair"
![Page 17: Pricing](https://reader036.fdocuments.in/reader036/viewer/2022070303/549388d6b47959f2108b47e2/html5/thumbnails/17.jpg)
Price Discounts
Quantity discount - offered to customers who purchase in large quantities.
Cumulative quantity discount - a discount that increases as the cumulative quantity increases.
![Page 18: Pricing](https://reader036.fdocuments.in/reader036/viewer/2022070303/549388d6b47959f2108b47e2/html5/thumbnails/18.jpg)
Price Discounts
Seasonal discount - based on the time that the purchase is made and designed to reduce seasonal variation in sales.
Cash discount - extended to customers who pay their bill before a specified date.
![Page 19: Pricing](https://reader036.fdocuments.in/reader036/viewer/2022070303/549388d6b47959f2108b47e2/html5/thumbnails/19.jpg)
Price Discounts
Trade discount - a functional discount offered to channel members for performing their roles.
Promotional discount - a short-term discounted price offered to stimulate sales.
![Page 20: Pricing](https://reader036.fdocuments.in/reader036/viewer/2022070303/549388d6b47959f2108b47e2/html5/thumbnails/20.jpg)
ACTIVITY
The PRICE is right
![Page 21: Pricing](https://reader036.fdocuments.in/reader036/viewer/2022070303/549388d6b47959f2108b47e2/html5/thumbnails/21.jpg)