Professional Documents
Culture Documents
PRICING
PRICING
Price
• Price is the amount of money charged for a product or service, or the
sum of all the values that customers exchange for the benefits of
having or using the product or service
Factors affecting Price
• Company’s costs
• Competition
• Customers
• Market structure
• Marketing environment
Setting the Price
• Analyze competition
• Select pricing method
• Select final price
Product Mix pricing strategies
• The cost differences between products in the line, customer
evaluations of the features, competitors price
1. Product line pricing- setting prices across the entire pdt line
2. Optional product pricing-pricing optional/ accessory pdt sold with
the main pdt
3. Captive product pricing- pricing pdts that must be used with the
main pdts
4. By product pricing- pricing low value by – pdts to get rid of /make
money
5. Product bundle pricing- pricing bundles of pdts sold together
Price Adjustment Strategies
Adapting the Price
• Discounts/ allowances- quantity discount, functional / trade discount,
• Differentiated pricing (segmented) –customer segmented, channel pricing,
Location based, Time based
• Promotional pricing- temporarily price below list price, cost
• Psychological pricing- reference price..
• Geographical price- FOB – origin, uniform delivered, zone pricing, basing
point, freight absorption pricing
• Dynamic pricing-
• International pricing- depends on economic condn, competitive situations,
laws & regulations
Initiating Price changes