You are on page 1of 292

) (

) (


-
/

PDF created with pdfFactory Pro trial version www.pdffactory.com


:
" : "
...
...
...

" "

--

PDF created with pdfFactory Pro trial version www.pdffactory.com


Pricing of Products and Services

.

.

.


.

.




--

PDF created with pdfFactory Pro trial version www.pdffactory.com

:
:

:
:

:
:

--

PDF created with pdfFactory Pro trial version www.pdffactory.com

/
/

/
/
/

-
-

/
/
/

PDF created with pdfFactory Pro trial version www.pdffactory.com

. .

Meaning of Price

.

-

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
.

) (


--

PDF created with pdfFactory Pro trial version www.pdffactory.com

) (

) (

.
.

.
.

) (
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

) ( Customer Cost = C2

... ( .

PDF created with pdfFactory Pro trial version www.pdffactory.com


) (
:

) (

) ( P2

.
.

) ( .


.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

- .

- .

- .

. - .

- .

- .

) ( .

- .

- .

. - .

- .

- .

- .

PDF created with pdfFactory Pro trial version www.pdffactory.com

- .

- .

- .

Importance of Price

/
Mind

In the Consumer's

. .

.
.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
.

.
/

In the Individual Firm

:
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

-
.

- .

- .

- .

- .

- ) ( .

In the Economy

:
.

.
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

. .

:
- .

-
.

-
.

- )
... ( .

PDF created with pdfFactory Pro trial version www.pdffactory.com

... (
. Cost Leadership

.
.

.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
:

<


- -

PDF created with pdfFactory Pro trial version www.pdffactory.com

Pricing Objectives

PDF created with pdfFactory Pro trial version www.pdffactory.com


:
) ( :

) ( :

* /

* /

) ( :

) ( :

.
:

//

Profit Maximization
- -

PDF created with pdfFactory Pro trial version www.pdffactory.com

Gillette

PDF created with pdfFactory Pro trial version www.pdffactory.com

( .
.

.
.

//

Target Return

PDF created with pdfFactory Pro trial version www.pdffactory.com

. :

%
. .

.
.

//

.
.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

:
//


.
.


- -

PDF created with pdfFactory Pro trial version www.pdffactory.com

// /

-
.

-
.

-
.
.
:

.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

% % .

.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

// /

.
.

/
:
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

//

.
//

. .

PDF created with pdfFactory Pro trial version www.pdffactory.com

(
.


. :

// :


.
)

( .

( .

.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

//


. .

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
:

. .

.
.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

PDF created with pdfFactory Pro trial version www.pdffactory.com

-
-
-

/
/

PDF created with pdfFactory Pro trial version www.pdffactory.com

Organizational & Managerial Considerations of


Pricing

.
:

- .

- .

- .

) ( .

PDF created with pdfFactory Pro trial version www.pdffactory.com

) ... (

) ( ...

) (
.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

. .

-
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

- .

-
.

-
.

-
.

-
.

-
)
... ( .

PDF created with pdfFactory Pro trial version www.pdffactory.com

.

.

.
/

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
.

- .

- .

PDF created with pdfFactory Pro trial version www.pdffactory.com

-
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

-
.

-
.

... .

-
.

-
.

-
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
.

.

.

- )
( .
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

-
.

-
.

- .

PDF created with pdfFactory Pro trial version www.pdffactory.com

Pricing and Society

Social Pricing
Social Responsibility and Pricing Ethics

High Price

-

.

PDF created with pdfFactory Pro trial version www.pdffactory.com

- .

.

Excessive Markup

.
.

.

.

PDF created with pdfFactory Pro trial version www.pdffactory.com

!
.

-
-

Deceptive Practices

)




-

(
Poor Service to Disadvantaged Consumers

.
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

PDF created with pdfFactory Pro trial version www.pdffactory.com


) (

) (

-
Too Few Social Goods

PDF created with pdfFactory Pro trial version www.pdffactory.com

-
Too Much Political Power

. .

/
Citizen and Public Actions to Regulate Pricing

Grass roots

Movements

. :
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

Consumerism

Environmentalism

" " .

) (

) (
. .
/
Government Actions Toward Socially Responsible Pricing

. - ) ( .

- .

.Society
) (Human welfare

Company
) ( Profit

The
Societal
Pricing
Concept
- -

Consumer

) Satisfaction
( Want

PDF created with pdfFactory Pro trial version www.pdffactory.com

Factors Affecting Price Decisions

-
-
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

Factors Affecting Price Decisions

:
.

:


.

PDF created with pdfFactory Pro trial version www.pdffactory.com

PDF created with pdfFactory Pro trial version www.pdffactory.com

-
/
Organizational and marketing objectives

PDF created with pdfFactory Pro trial version www.pdffactory.com

.

.

.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

- .

-
.

-
) ( .

- .
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

-

.

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
.

.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
/

.

-

PDF created with pdfFactory Pro trial version www.pdffactory.com

) (

) (

/
Marketing Mix Strategy

.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

PDF created with pdfFactory Pro trial version www.pdffactory.com


.
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

) (

Process
. Design to Price

.
.

- .

- .

- .

- /
.

- )
( .

- .

PDF created with pdfFactory Pro trial version www.pdffactory.com

-
.

.
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

B.M.W.

/ Costs

.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

. :

= +
+

.
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

= +

.


.

= +

.


-

PDF created with pdfFactory Pro trial version www.pdffactory.com

PDF created with pdfFactory Pro trial version www.pdffactory.com

-
/

PDF created with pdfFactory Pro trial version www.pdffactory.com

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

:
.

/
Consumer Perceptions of Price and value

.

.

. .
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

) (

.
.

.
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

) (

PDF created with pdfFactory Pro trial version www.pdffactory.com

) (

.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

.

.

PDF created with pdfFactory Pro trial version www.pdffactory.com

PDF created with pdfFactory Pro trial version www.pdffactory.com

. .

) (
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

PDF created with pdfFactory Pro trial version www.pdffactory.com

/
Pricing in Deferent Types of Market

.

. .

//
Pure Complementation

.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
.

// Monopolistic Competition

) (

.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
.
.
.

) ( .
//

Oligopolistic Competition

)
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

( .
.
.

. .

PDF created with pdfFactory Pro trial version www.pdffactory.com

- Collusion

PDF created with pdfFactory Pro trial version www.pdffactory.com

-
.

// Pure Monopoly

.
.

. .
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

Regulated Monopoly

.
Nonregulated Monopolies

.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com


.
.




Plc

/ Analyzing the price Demand


-

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

P2

P3

P1

P2
P1

Q1

Q2

Q1 Q2

Q3

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
.


.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com


=
=
=

-
.

-
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

- .

- )
( .

PDF created with pdfFactory Pro trial version www.pdffactory.com

/
.

) (

OPEC

Competition
/

PDF created with pdfFactory Pro trial version www.pdffactory.com

... .


. :
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

-
.

-
.

-
.

.
) (
.

) ( .

PDF created with pdfFactory Pro trial version www.pdffactory.com

) ( .

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
-
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

. :
- .

- .

- .

PDF created with pdfFactory Pro trial version www.pdffactory.com

PDF created with pdfFactory Pro trial version www.pdffactory.com

-
.

-
.

-
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

-
.

-
.

-

.

.

.
:

-
.

PDF created with pdfFactory Pro trial version www.pdffactory.com


- /



*
*
*
*

PDF created with pdfFactory Pro trial version www.pdffactory.com

PDF created with pdfFactory Pro trial version www.pdffactory.com

-
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

- .

PDF created with pdfFactory Pro trial version www.pdffactory.com



) (
) (



) ( ...

- -


:


:



:





PDF created with pdfFactory Pro trial version www.pdffactory.com


Descriptive Models


Optimization Models


Predictive Models

- -

PDF created with pdfFactory Pro trial version www.pdffactory.com

Strategies Pricing Products

PDF created with pdfFactory Pro trial version www.pdffactory.com

Strategies Pricing Products

. :

PDF created with pdfFactory Pro trial version www.pdffactory.com

-
New- Product Pricing Strategies


-

PDF created with pdfFactory Pro trial version www.pdffactory.com

PDF created with pdfFactory Pro trial version www.pdffactory.com

- .

- .
- .

. :


.
.

/ ) (
Market Skimming Pricing

PDF created with pdfFactory Pro trial version www.pdffactory.com

.

.
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

- ) ( .
- .

J . V . C .
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

-
.

- .

-
.

-
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
:

- .

-
.

- .

- .

-
.

- .

-
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

:
- .

.
.

.
.

/ ) (
Market Penetration Pricing

. .

.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

.

.

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
:

-
.

- .

) (
) (
)(
) (

.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

PDF created with pdfFactory Pro trial version www.pdffactory.com


.
.

-

.

-
) (

-
.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

-
.

- .

-
) ( .

PDF created with pdfFactory Pro trial version www.pdffactory.com

PDF created with pdfFactory Pro trial version www.pdffactory.com

-

.

( . :
/

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

) ( .

, , .

,
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

PDF created with pdfFactory Pro trial version www.pdffactory.com

.

... .

.

.

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
/

.


.

PDF created with pdfFactory Pro trial version www.pdffactory.com

-
Pricing Discrimination Strategy

Flexible Price Strategy

.
/

.
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

-
.

-
.

-
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
.

) (
) (

) ( .

PDF created with pdfFactory Pro trial version www.pdffactory.com


.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

. :

. .

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
.

. %
% .

) ( .

PDF created with pdfFactory Pro trial version www.pdffactory.com

( ...

. ) (....

.

.

PDF created with pdfFactory Pro trial version www.pdffactory.com

PDF created with pdfFactory Pro trial version www.pdffactory.com

:
/

.... . .

PDF created with pdfFactory Pro trial version www.pdffactory.com

-
.

-
.

PDF created with pdfFactory Pro trial version www.pdffactory.com


.
/


.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
/

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
.
/

PDF created with pdfFactory Pro trial version www.pdffactory.com


180B 200B

% .

. 180B

200B .

-
.


- -

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
.

-

.

-
.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

-
.

:
.

.
:

:
.

:
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

PDF created with pdfFactory Pro trial version www.pdffactory.com

-
Promotional Price Strategy

.
:

- .

-
.

-
.

-

" " .
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

-
.

- One- Price Strategy



. .

PDF created with pdfFactory Pro trial version www.pdffactory.com

- .
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

-
.

- .

-
.

- .

-
.

-
.

-
-

PDF created with pdfFactory Pro trial version www.pdffactory.com


. .

:
- .

- .
- .

- .

- .

PDF created with pdfFactory Pro trial version www.pdffactory.com


SELECT PRICING OBJECTIVE

SELECT METHOD OF DETERMINING THE BASE PRICE :

Cost - Plus
pricing

Price based on
both demand
and costs

Price Set in
relation to
market alone

DESINGN APPROPRIATE STRATEGIES


Price VS. nonPrice
Competition
Skimming VS.
Penetration Discounts
and Allowances

Freight Payments

Leader Pricing

One Price VS. Flexible

Everyday low VS.

Price

high - low Pricing

Psychological Pricing

Resale Price
Maintenance

The price Determination Process


-

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
:

.
.

-
.

-
.

.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

-

.

:
- .

-
.

-
.

.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

PDF created with pdfFactory Pro trial version www.pdffactory.com

Quantitative Approach for Pricing

-
-
-
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

Quantitative Approach for Pricing

- :
* .

* .

-
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

- .

-


)

... ( .

- .
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

PDF created with pdfFactory Pro trial version www.pdffactory.com

- .

- .

- .
1- Descriptive Vs . Normative Models .
2- Deterministic Vs . Probabilistic or Stochastic Models

3- Mathematical Vs . Non mathematical Models .


- Model Building Approach

.
/

Profit Model

=
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

=)(

/ Break Even Analysis


. .

=
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

+
=+

) ( :

PDF created with pdfFactory Pro trial version www.pdffactory.com


. :

- .

- .
- .
:

PDF created with pdfFactory Pro trial version www.pdffactory.com

) (

.

/ Target Pricing

.
=

++

=
- -

PDF created with pdfFactory Pro trial version www.pdffactory.com


) ( ) ( .

/
Product Analysis Pricing
.

.
.

= + + ................ +

............ =

PDF created with pdfFactory Pro trial version www.pdffactory.com

.......... =

/ Quality Adjusted
Pricing


) ( .

.
.

= + + .............. + +

........ =
- -

PDF created with pdfFactory Pro trial version www.pdffactory.com

....... =

= .

-
:

- .

PDF created with pdfFactory Pro trial version www.pdffactory.com

- .

- .

- .

- .

- Sales Analysis

.

PDF created with pdfFactory Pro trial version www.pdffactory.com

) (
.


. %

.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

% .

%
.



% .


% .:

- .

-
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

% .

% .


-
:

: - .
.


.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

:
- =

- = ,

-
:

- % .
-

. %
After

100
.
.
.

Before
10
100

970
.

Data
Price $
Units Sold
Revenue $
Costs
Profit $

Profit increase = . $
Percent Profit increase = .. %

.
- -

PDF created with pdfFactory Pro trial version www.pdffactory.com

. %

PDF created with pdfFactory Pro trial version www.pdffactory.com


) (
:

PDF created with pdfFactory Pro trial version www.pdffactory.com

, .

, .
, :

,
,

, .

PDF created with pdfFactory Pro trial version www.pdffactory.com

. :

()

)(

)(

PDF created with pdfFactory Pro trial version www.pdffactory.com

-

.

-
.

, .

PDF created with pdfFactory Pro trial version www.pdffactory.com

Discounts and Allowances

-
-
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

Discounts and Allowances

- .

- .

- .
- .

- .

- .

- .

- .
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
.

.
.
.

. /

. /

. .

.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

:
* ) / (

* ) (

* ) (

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
.

:
//

) (


.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
.

.
//

%
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

%
%
%

PDF created with pdfFactory Pro trial version www.pdffactory.com

-
.

-
.

-
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

) ( .

.

-

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
.

-
.

//

. %

PDF created with pdfFactory Pro trial version www.pdffactory.com

. //

. %

/ /

: .

PDF created with pdfFactory Pro trial version www.pdffactory.com

) ( //

. %

.
=

= %
= %

= %, = , %

3/10 , NET 30
Number of
days from date
of invoice after
which bill is
overdue

Number of days
from date of invoice
in which bill must be
paid to receive cash
discount

Percentage to be
deducted if bill is
paid within
specified time

1/7 , NET 30
Parts of a Cash Discount
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

. )


.
.

) - %

( %
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

% % .

.
) ( % - %

% % %
% .

.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com


) ( .

/ .

:
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

/ ) (

.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

)(.

PDF created with pdfFactory Pro trial version www.pdffactory.com

. :

-
.

-
.

-
.

-
.

-
.

.
:

PDF created with pdfFactory Pro trial version www.pdffactory.com

-
.

-
.

-
. .

-
. :

-
.

-
.

-
.

- :


) ( .

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
:

PDF created with pdfFactory Pro trial version www.pdffactory.com

- .

- .

- :
)(

)( =

- .

- :
= +

-
.

-
:

PDF created with pdfFactory Pro trial version www.pdffactory.com

- .

- :

- .
) ( :

%
%

PDF created with pdfFactory Pro trial version www.pdffactory.com

,
,


=
=
=
=
=


,
,
,
,

% =
% =

% =

,
,

%, =

PDF created with pdfFactory Pro trial version www.pdffactory.com

= = ,

= , = ,

= ,=,

= , = ,

,
,

%,

PDF created with pdfFactory Pro trial version www.pdffactory.com

) (

,
, ,

PDF created with pdfFactory Pro trial version www.pdffactory.com

,
,

=
=
=
=

,
,
,
,

,
,
,

%, =
%, =
% =
% =

PDF created with pdfFactory Pro trial version www.pdffactory.com

=, = ,

=, = ,

= , = ,

== ,

,
,

%,

%,

PDF created with pdfFactory Pro trial version www.pdffactory.com

Services Pricing

-
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

Services Pricing

. .

:
- .

-

) % . ( %

PDF created with pdfFactory Pro trial version www.pdffactory.com

. .

-
.
.

)(

.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

- )

( .
.

-
.

) ( .

- .

.
- -

PDF created with pdfFactory Pro trial version www.pdffactory.com

- .

-
.
.

. :

PDF created with pdfFactory Pro trial version www.pdffactory.com

-
.

- .
:

-
.

.

.

- .
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

- .

-
.

- .

- .

PDF created with pdfFactory Pro trial version www.pdffactory.com

:
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

- .

- .
- .
- .
.

-
.

- ) ( .

-

PDF created with pdfFactory Pro trial version www.pdffactory.com

- .

Bundling

PDF created with pdfFactory Pro trial version www.pdffactory.com

-
.

-
.

- :
.

-
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
.

-
Governmental Service Pricing

PDF created with pdfFactory Pro trial version www.pdffactory.com

- .

.

-
.

-
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

- .

-
.

-

) ( .

-
.

.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

PDF created with pdfFactory Pro trial version www.pdffactory.com

PDF created with pdfFactory Pro trial version www.pdffactory.com

Price is the only element of the marketing mix that is


revenue-generating ; all of the others are costs .


.
:
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

.

:


Uncontrolable Factors
Controlable Factors

* .

* .

* *
.

* * .
.

*
.

*
.

* * .
.

*
.

PDF created with pdfFactory Pro trial version www.pdffactory.com



Uncontrolable Factors
Controlable Factors

* ) *
.

.(...

* *

.
)
(

- :

Corporate Objectives

PDF created with pdfFactory Pro trial version www.pdffactory.com

. .
.
:
.

)
( .

.
.

Costs

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
.

PDF created with pdfFactory Pro trial version www.pdffactory.com


) (.... J.V.
) ( .

-
.

.


.

.
.
:

PDF created with pdfFactory Pro trial version www.pdffactory.com


.
.

Antitrust Law .

-

.

.
.

.


.

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
. .

.

PDF created with pdfFactory Pro trial version www.pdffactory.com


)
( .

.


Demand

.
.
.

PDF created with pdfFactory Pro trial version www.pdffactory.com


.

.

.

.



.
.

- Competition
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

oligopoly
.



.

.

PDF created with pdfFactory Pro trial version www.pdffactory.com


. :
.

:
.

:
.

.

-

. )
( :
:

PDF created with pdfFactory Pro trial version www.pdffactory.com

:

.

:
.
The Firm has to consider many Factors in setting its
pricing policy .
Target Market Analysis

)(1

(2) Mix Composition


Market

)(2

Pricing Policy Selection

)(3

Pricing Strategy Determination

)(4
)(5

Specific Price

Stages in Setting of Prices

PDF created with pdfFactory Pro trial version www.pdffactory.com


SELECT PRICING OBJECTIVE

SELECT METHOD OF DETERMINING THE BASE PRICE :


Cost - Plus
Price based on
Price Set in
pricing
both demand
relation to
and costs
market alone

DESINGN APPROPRIATE STRATEGIES


Leader Pricing
Price VS. nonPrice
Freight Payments
Competition
One Price VS. Flexible Price
Everyday low VS. high- low
Skimming VS. Penetration
Psychological Pricing
Pricing
Discounts and Allowances
Resale Price Maintenance

The Price - determination Process


(1) Selecting the pricing objective
(2) Determining demand

(3) Estimating Costs

(4) Analyzing Competitors' Costs,


Prices , and offers
(5) Selecting a Pricing method
(6) Selecting a the Final Price

Setting Pricing Policy

PDF created with pdfFactory Pro trial version www.pdffactory.com


:
.

International Involvement
Exporting Intra company Foreign -Market
Pricing

Pricing
Situation

Pricing

First-Time
Pricing
Changing
Pricing
MultipleProduct Pricing
International Pricing Situations

PDF created with pdfFactory Pro trial version www.pdffactory.com

Export Pricing

. :
.
.
.

.

.

. CIF,C&F,FOB CIF

Ex-Factory

.
.

PDF created with pdfFactory Pro trial version www.pdffactory.com


.

.

ExFactory

* *
.

*
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

FOR or
FOT

* *

*
.

.
FAS

*
.

.
.

* *
.
.

PDF created with pdfFactory Pro trial version www.pdffactory.com




* FOB *
.

.
.

*
.

* .

C&F

* *

*
.



*
*

*


)

( .

PDF created with pdfFactory Pro trial version www.pdffactory.com

* CIF *

.

*
.

*

.


.
.

PDF created with pdfFactory Pro trial version www.pdffactory.com


.
.

....
.

.
:
- .
- .
- )(.
- .
- .
- .
- .

- .
- .

- )
(.

PDF created with pdfFactory Pro trial version www.pdffactory.com


-
Cost Oriented Pricing Strategy
= +


:
.

.
.

.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com


) ( = -

-
Competition Oriented Pricing Strategy

.

) ( = -



/ .
-
Demand Oriented Pricing Strategy


.
-
Market Skimming Pricing Strategy

PDF created with pdfFactory Pro trial version www.pdffactory.com



.
:
.


.
-
Market Penetration Pricing Strategy
"

"


.

PDF created with pdfFactory Pro trial version www.pdffactory.com

:
.

.
-

Lead Pricing Strategy

.
.

.
-

Pricing Discrimination

PDF created with pdfFactory Pro trial version www.pdffactory.com


.

:

.
.
.


.

.

.
-
Market Oriented Pricing Strategy
Oligopoly

PDF created with pdfFactory Pro trial version www.pdffactory.com


.
:

/
/
.
-

ROI Pricing Strategy


.

.

-
Transfer/ Intracorporate Pricing

.

PDF created with pdfFactory Pro trial version www.pdffactory.com


. Headquarter
.
Transfer pricing , or intracorporate pricing , is the
pricing of sales to members of the corporate family .
:

PDF created with pdfFactory Pro trial version www.pdffactory.com


*
*
*

.
:

PDF created with pdfFactory Pro trial version www.pdffactory.com


- :
*

*
)
... ( .
-
*
.

* .
* ) (....
.

* .
-
*
.

* .

PDF created with pdfFactory Pro trial version www.pdffactory.com


-
:



.
.
:
) (



.
.

: .
.

PDF created with pdfFactory Pro trial version www.pdffactory.com


:
.

Influences on Transfer Pricing Decisions


1. Market conditions in the foreign country .
2. Completion in the foreign country .
3. Reasonable profit for the foreign affiliate .
4. Income taxes in the home country .
5. Economic conditions in the foreign country .
6. Import restrictions .
7. Customs duties .
8. Price controls .
9. Taxation in the foreign country .
10. Exchange controls .

:
Intra- Country Transfer Price

%
.
:

PDF created with pdfFactory Pro trial version www.pdffactory.com


Intercountry Transfer Price

. %


.

:
-


Transfer Price Lower Than Arm's Length Prices
:
) (.

.

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
.
" " .


Transfer Price Higher Than Arm's Length Prices
:
.


Transfer Pricing Objectives :
Competitiveness in the international marketplace .
Reduction of taxes and tariffs .
Management of Cash Flows .
Minimization of Foreign exchange risks.

Avoidance of Conflicts with home and host governments .


Internal Concerns Such as goal Congruence and motivation
of Subsidiary managers.

:
/ .

PDF created with pdfFactory Pro trial version www.pdffactory.com

.

.

.


.

.

) ( .
.

PDF created with pdfFactory Pro trial version www.pdffactory.com



.
.

.

*

.

PDF created with pdfFactory Pro trial version www.pdffactory.com


Transfer Prices can be based on costs or on market
prices or on arm's - length price .

:
-
Cost - based Transfer Pricing
. ACS
*
* ) SCS (.
* . MCS


.

:
.
.

+ .
+ .

PDF created with pdfFactory Pro trial version www.pdffactory.com


-
Market - based Transfer Pricing

.

MPS
.

MMPS
.

-
:
* )Negotiated Price Strategy (NPS
.
* ) (CPS
.


Arm's-Length
. Prices

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
:
.
.

.
) (
.

:
) ( Barriers of Trade
Cost Factors

...
...
International

Transfer Price

PDF created with pdfFactory Pro trial version www.pdffactory.com



) (



) ( .

) (


:
*
.
* .
* .
)
(


-

. /

PDF created with pdfFactory Pro trial version www.pdffactory.com


* ) / (
*
* )(
* ) (
*

.
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
:
.
-

.

.
-

.

.

PDF created with pdfFactory Pro trial version www.pdffactory.com

.

.

. :


- Export Pricing Challenges
.

.
:

PDF created with pdfFactory Pro trial version www.pdffactory.com

.

.
-

.
.

.
.
-

.

PDF created with pdfFactory Pro trial version www.pdffactory.com

Price
Medium

Low
(3) Super - Value
Strategy
(6)Good-Value
Strategy

(2) High-Value
Strategy
(5)Medium-Value
Strategy

(8) False
(9) Economy
economy Strategy Strategy

High
(1) Premium
Strategy
)(4
Overcharging
Strategy
(7) Rip-off
Strategy

High

Medium

Low

Nine Price-Quality Strategies


-


.
:

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
:
.

. .


.

.
.

.
-
Transfer Pricing Challenges


. :

PDF created with pdfFactory Pro trial version www.pdffactory.com


- .

- .
-
.
-
.

.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

% .

.
) (
.


Intrafirm Transactions
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

PDF created with pdfFactory Pro trial version www.pdffactory.com

E Pricing

/
/
/

PDF created with pdfFactory Pro trial version www.pdffactory.com

E Pricing
:

( .

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

.


.


. Price robots :

- yahoo.com
- buys.com
- Killo.com
- Altavista.digital.com
) (

. Disintermediation

PDF created with pdfFactory Pro trial version www.pdffactory.com

) (

.

.

PDF created with pdfFactory Pro trial version www.pdffactory.com

- .

- .

- Prices Personalization


Mass Marketing or one to
All Marketing .
Direct Marketing or one to one marketing

-
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

:
- .

-
.

- .

- .
- .

- ) (
.

) (

.
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

PDF created with pdfFactory Pro trial version www.pdffactory.com

.
) ... (

) ( )

( ) ( )

( )

( )

... ( .

/
-

PDF created with pdfFactory Pro trial version www.pdffactory.com

PDF created with pdfFactory Pro trial version www.pdffactory.com

Banners / .

Netscape,Yahoo, Microsoft , Infoseek , Excite , and Lycos.

- : Click-Through
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

- : Hits
.

- : Page Impressions

.
.

- .

PDF created with pdfFactory Pro trial version www.pdffactory.com

-
.

- /
.

CPM

.
.

PDF created with pdfFactory Pro trial version www.pdffactory.com

:
- .

- .

- .

- .

- .
- .

- .

. :

- : Impressions
.
.

- : Click Through Rate


.

PDF created with pdfFactory Pro trial version www.pdffactory.com

PDF created with pdfFactory Pro trial version www.pdffactory.com

. : .
. : . .
. : : .

. :


.
. : . . . . : .
. : .

. . .
. . .
-

PDF created with pdfFactory Pro trial version www.pdffactory.com


. : .
. : .

. : . .
. : .
. . : :
.

. . :
.
. : .
. . :
: . :

PDF created with pdfFactory Pro trial version www.pdffactory.com


: . :
. .
. . :

th

- Michael J . Etzel , etal ., Marketing , 11 ed .; N . Y . :


McGraw Hill Companies , Inc. ,
1997 .
- Michael R . Czinkota & LIKKa A . Ronkainen , Global
Marketing , N . Y . : Harcourt
Brace & Co ., 1995 .
- Philip

kotler

,Marketing

Management

the

Millennium ed . ; N . J . : Prentice
Hall International , Inc ., 2000 .
- William D. Perreault , Jr. and E. Jerome McCarthy ,
Essentials of Marketing : A Global
Managerial Approach , 8th ed .;

PDF created with pdfFactory Pro trial version www.pdffactory.com


N. Y. : McGraw Hill Companies ,
Inc., 2000 .

PDF created with pdfFactory Pro trial version www.pdffactory.com

You might also like