PRICING STRATEGY REVIEWER
a fair rate of return for effort and risk.
I.
Definition of price: According to Philip
Kotler, “Price is the amount of money
charged for a product or service.”
Broadly, price is the total amount that
being exchange by the customer to
obtain a benefit of the product or service
owning.
Pricing Objectives: Pricing objectives
are the goals that guide your business in
setting the cost of a product or service
to your existing or potential consumers.
Some examples of pricing objectives
include maximizing profits, increasing
sales volume, matching competitors’
prices, deterring competitors—or just
pure survival. Retrieved by the
blog.blackcurve.com
Pricing Process: Pricing can be
defined as a process of determining the
value that is received by an organization
in exchange of its products or services.
The price of product is influenced by a
number of factors, such as
manufacturing cost, competition, market
conditions, and quality of the product.
Retrieved by economicsdiscussions.net
II. PRICING STRATEGIES
Customer-value based pricing:
Setting price based on buyers’
perceptions of value rather than on the
seller’s cost.
Cost-based pricing: Setting prices
based on the costs for producing,
distributing, and selling the product plus
Competition-based pricing: Setting
prices based on competitors’ strategies,
prices, costs, and market offerings.
III. NEW PRODUCT PRICING
STRATEGIES
Market-skimming pricing: (price
skimming) Setting a high price for a new
product to skim maximum revenues
layer by layer from the segments willing
to pay the high price; the company
makes fewer but more profitable sales.
Market-penetration pricing: Setting a
low price for a new product to attract a
large number of buyers and a large
market share.
IV. PRODUCT MIX PRICING
STRATEGIES
Product line pricing: Setting the price
steps between various products in a
product line based on cost differences
between the products, customer
evaluations of different features, and
competitors’ prices.
Optional product pricing: The pricing
of optional or accessory products along
with a main product.
Captive product pricing:
Product bundle pricing: Combining
several products and offering the bundle
at a reduced price.
V. PRICE ADJUSTMENT
STRATEGIES
Discount and allowance pricing: One price policy:

Segmented pricing: Selling a product International pricing strategy:

or service at two or more prices, where
the difference in prices is not based on Price changes:
differences in costs. Discount and allowance pricing:
Psychological pricing: Pricing that Leader pricing:
considers the psychology of prices, not
simply the economics; the price says The practice of foolish penetration:
something about the product.
Odd pricing:
Promotional pricing: Temporarily
Marginal cost pricing:
pricing products below the list price, and
sometimes even below cost, to increase Sealed-bid pricing:
short-run sales.
Price quality positioning matrix:
Geographical pricing: Setting prices
for customers located in different parts Fighting price attack:
of the country or world.
Flunker Fight strategy:
Dynamic pricing: Adjusting prices
Non-price responses:
continually to meet the characteristics
and needs of individual customers and Quality pricing:
situations.
Alliance pricing strategy:
International pricing:
Prestige pricing:
OTHERS:
Variable pricing: Prices that vary
Flexible pricing: directly with the level of production.

Porter’s Generic Strategy: Cost advantage:

Loss leader pricing:

Customary pricing:

Two-part pricing:

Pricing across channel levels:

Pricing strategy within channel

levels:

Markdown pricing strategy: