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    rohan tanwar
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    Pricing is critical for a firm's top and bottom lines. It directly impacts revenue and profits. There are different pricing objectives that require different tactics. When changing an existing product's price, it is important to consider customer perceptions of value. Segmented pricing can target different customer groups through channels or time periods. Price elasticity measurement is key to understanding customer response to price changes. Conjoint analysis is a useful market research technique to measure price-value relationships and predict customer response curves.

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    Pricing is critical for a firm's top and bottom lines. It directly impacts revenue and profits. There are different pricing objectives that require different tactics. When changing an existing product's price, it is important to consider customer perceptions of value. Segmented pricing can target different customer groups through channels or time periods. Price elasticity measurement is key to understanding customer response to price changes. Conjoint analysis is a useful market research technique to measure price-value relationships and predict customer response curves.

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    19 views28 pages

    Pricing

    Uploaded by

    rohan tanwar
    Pricing is critical for a firm's top and bottom lines. It directly impacts revenue and profits. There are different pricing objectives that require different tactics. When changing an existing product's price, it is important to consider customer perceptions of value. Segmented pricing can target different customer groups through channels or time periods. Price elasticity measurement is key to understanding customer response to price changes. Conjoint analysis is a useful market research technique to measure price-value relationships and predict customer response curves.

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    of 28

    IMPORTANCE OF PRICING

    Pricing is the only action that impacts a firm’s top line and bottom line directly and immediately – it is where
    the marketing rubber meets the customer’s road

    • Price defines segments at the first level (Alt vs Swift vs • Pricing offers disruption possibilities
    SX4 vs Vitara vs Kizashi) • A Micromax A90 5” AMOLED screen smartphone
    • Any change in pricing has a direct impact on the top line with a 8 megapixel camera for INR 13,000 versus
    and the bottom line INR 35,000 (for Apple or Samsung)
    • A 1% change in realized price can change net profits • A Re. 3 shampoo pouch versus INR 150 shampoo
    upto 11% (McKinsey Study) bottle
    • Price discounts and price bundles are an integral part of
    daily pricing

    Questions to ask on pricing when launching a new product


    1. What are the corporate and marketing objectives (Goal of pricing)
    2. What are the relevant incremental costs?
    3. How does the customer think about the pricing of the product / service?
    DIFFERENT PRICING OBJECTIVES – DIFFERENT TACTICS
    PRICING OBJECTIVES
    WHEN CHANGING PRICE OF AN EXISTING PRODUCT
    SEGMENTED PRICING
    PRICE SEGMENTATION BY CHANNEL

    E.g. Cold Drinks


    PRICE SEGMENTATION BY TIME OF PURCHASE

    E.g. Airlines
    PRICE REPONSE MODELS
    PRICE ELASTICITY MEASUREMENT
    PRICE ELASTICITY & CROSS ELASTICITY
    ELASTICITY USING HISTORICAL DATA
    ELASTICITY USING HISTORICAL DATA
    ELASTICITY USING CONJOINT

    Conjoint is about measuring the Price/Value relationship through market research

    LION, German and


    Japanese are car
    manufacturers , trying to
    enter in the European
    market
    ELASTICITY USING CONJOINT : PAIRED COMPARISON
    ELASTICITY USING CONJOINT : RELATIVE IMPORTANCE
    ELASTICITY USING CONJOINT : RELATIVE ATTRIBUTE VALUES
    ELASTICITY USING CONJOINT : TOTAL RELATIVE VALUE
    ELASTICITY USING CONJOINT : PRICE RESPONSE CURVE
    ELASTICITY USING CONJOINT : TOMATO KETCHUP
    ELASTICITY USING CONJOINT : TOMATO KETCHUP
    STEPS IN CONJOINT
    PITFALLS IN CONJOINT
    USES OF CONJOINT
    PURPOSE OF CONJOINT
    ASSUMPTIONS : CONJOINT
    EFFECT OF PRICE CHANGES ON BRAND SELECTION
    PRICING & CUSTOMER EVALUATION PROCESS

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