DESIGNING PRICING

STRATEGIES AND
PROGRAMS
 Setting the price Policy

It include six steps:

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 the final price
Determining demand
 Determining demand

price sensitivity:
-unique value effect
-substitute awareness effect
-difficult comparison effect
-total expenditure effect
-end benefit effect
-shared cost effect
 Price sensitivity

sunk investment effect

-Price quality effect
-inventory effect
-estimating demand curves:

Price elasticity of demand

Estimating cost
 Estimating cost

Types of costs and level of

production
Accumulated production
Differentiated marketing offers
Target costing
Selecting a pricing method
 Selecting a pricing method

Markup pricing
Target return pricing
Perceived value pricing
Value pricing
Going rate pricing
Sealed bid pricing
Selecting the final price
 Selecting the final price
Company includes the factors
including :
1- psychological pricing
2- the influence of other marketing
mix element on price
3- company pricing policies
4- impact of price on other parties
Product mix pricing
 Product mix pricing

Product line pricing

Optional pricing
Captive pricing
Two part pricing
By product pricing
Product bundling pricing