PRICING MANAGEMENT

PRICING DECISIONS
AFFORDABLE
COST

Marketing Management – II (MM-II)

Section E & F
MBA-BM (Batch 2021-2023)

Prof. Nirali Shah

nirali@xim.edu.in
 UNDERSTANDING PRICING

 A changing pricing environment

 From consumer’s position
 From seller’s position

 Consumer psychology & pricing

 Reference price
 Price-quality inference
 Price endings
 SETTING THE PRICE

Selecting the
Determining Estimating
pricing
demand costs
objective

Analyzing
Selecting a
Selecting the competitors’
pricing
final price costs, prices,
method
and offers
 PRICING OBJECTIVES
 Survival

 Maximum current profit

 Maximum market share

 Maximum market skimming

 Product quality leadership

 Other objectives
 DETERMINING DEMAND
 Price sensitivity
 Price elasticity to demand
 ESTIMATING COSTS
 Type of costs

 Accumulated production

 Target costing
ANALYZING COMPETITOR’S COSTS,
PRICES, AND OFFERS
 PRICING METHODS
 Markup pricing
 Target return pricing
 Perceived value pricing
 Value pricing
 Everyday low-pricing
 Going rate pricing
 Auction type pricing
 SELECTING THE FINAL PRICE
 Impact of other marketing objectives

 Company pricing policy

 Gain and risk sharing policy

 Impact of price on other parties

 ADAPTING THE PRICE
 Geographical pricing

 Price discounts and allowance

 Promotional pricing

 Differentiated pricing
 GEOGRAPHICAL PRICING
 Cash or countertrade

 Countertrade
 Barter
 Compensation deal
 Buyback arrangement
 Offset
PRICE DISCOUNTS AND ALLOWANCES

 Discount
 Quantity discount
 Functional discount
 Seasonal discount

 Allowance
 Trade-in
 Promotional
 PROMOTIONAL PRICING

 Loss-leader pricing

 Special event pricing

 Cash rebates

 Low-interest financing

 Longer payment terms

 Warranties and service contracts

 Psychological discounting
 DIFFERENTIATED PRICING
 Price discrimination
 First-degree
 Second-degree
 Third-degree
 Customer-segment pricing
 Product-form pricing
 Image pricing
 Channel pricing
 Location pricing
 Time pricing
 CUSTOMER SEGMENT PRICING:
KONARK SUN TEMPLE – ENTRY FEE
PRODUCT FORM PRICING:
MYNTRA - WOMEN KURTI
 CHANNEL PRICING:
PAPER BOAT – ANAR JUICE
LOCATION PRICING:
STADIUM TICKET
TIME PRICING:
MOVIE HALL