DEVELOPING PRICING STRATEGIES AND PROGRAMS

Presentation by Srujan Dasari

HOW

SHOULD A COMPANY ADAPT PRICES

TO MEET VARYING CIRCUMSTANCES

ANDOPPURTUNITIES ?

Geographical Pricing:How to price to different customers at different locations?

Counter-trade(15~20%): Many buyers want to offer other items in exchange.

Forms of World Trade:

• Barter• Compensation Deal: some percentage in cash, rest in products• Buyback arrangement: accept products manufactured with

supplied goods as partial payments• Offset: receive full payment in cash but agree to spend some amount in the country

Price, Discounts and Allowances:If DISCOUNTING becomes the NORM, product value can be UNDERMINED

Some product categories self-destruct by always being on sale.

It can be a Mistake for strong, distinctive brand to plunge into price-discounting

Promotional Pricing:

1. Loss-leader pricing2. Special event pricing3. Special customer pricing4. Cash rebates5. Low-interest financing6. Longer payment terms7. Warranties and

service contracts8. Psychological discounting

Differential Pricing:Price discrimination: Company sells a product at two or more places that do not reflect a proportional difference in costs

1. Customer segment pricing: different customers pay different prices for same product

2. Product-form pricing: different versions priced differently, disproportionate to costs

3. Image pricing: charge different prices based on image-differences

4. Channel pricing: price change with change in supply-channel

5. Location pricing: different prices at different Locations.

6. Time pricing: prices varied by season.

7. Yield pricing: discounted early prices, higher late prices

DISCLAIMER

Created by Srujan Dasari, IIT Kharagpur,

during an internship by

Prof. Sameer Mathur, IIM Lucknow.

www.IIMInternship.com