1.

PRICE-OFFER CONFIGURATION is differences in the value of an offer across segments is caused by

differences in the value associatedwith features, services, or both, a seller can segment the market by
configuring different offers fordifferent segments. The price offer configuration bundling:selling product
in bundle.

For example, luxury, sport, basic package in cars. Another example can mo be food menu, such as set 1
or set 2. The core product is main in thissegment, for example in set 1 if the rice is not good enough
thancustomers will not like the side items. The price-offer configuration -useful when different
customers have different price sensitivities for a core product or service. -and when there are features
or services that one segment values and another may not.

2.Multipart price structures Defines and organizes price for your company’s product or services

Pricing structures prices products and services so that it make sense to customers and gets them to buy

. OBJECTIVE

- to charge a rate that aligns with your pricing strategy while balancing profits with what the
market will bear to avoid over-or under-charging customers. PRICING STRUCTURES: Flat rate

- you choose one price for your offerings or product and services. This works great when you
have a single product or services, or you have an hourly rate that doesn’t change.

Tiered pricing

- to set different product price based on value. The greater the value the higher the price or vise
versa the lower the value tha lower the price.

pay per use

This pricing structures charges based on how much of your offering is used

Ex: electricity

Razor-blade pricing

- this approach is called “razor- and –blade”, it is how the model works. You sell a core
product(razor) then make money from selling complementary products(the razor blades)

Prices are dynamic. The cost increase as the suppliers charge more. Pricing structures keeps you
organized in this dynamic environment

Robust pricing structure is important to maximise sales and profit. If your pricing structure is too
simplistic or lacks price controls, particularly in B2B sales, you end up with prices all over the map

B2B(business to business)
 - refers to transactions that occur between two business.

- basic form – one company or business sells a product or services to another business

3.PRICE FENCES

WICH IS PRICE FENCES

-are a means to charge different customer different price

-rules and regulations consturcted to prohibit customers from one vegment to another in on attempt to
receive a lowen note

* Types include

- Buyer identification fencer(e.g,.airlines student/ senior membership)

-Purchase location fences(e.g.,grocery crains, management -notes, airlines ...)

-Purchase quality fences

*Vulume discount

*Order discount

*Step discount

* Two- pant pricing(e.g.,printer and cantridges

4.Bundling is when companies package several of their products or services together as a single
combined unit, often for a lower price than they would charge customers to buy each item separately.
Same product bundling - users can buy more than one item as the same product and save money.

Mixed product bundling - users can buy different types of products cheaper than buying them
separately.

5. Version princing strategy

-Versioning means you develop a lowest-cost base price model that captures your most sensitive
costumers while insuring tolerable margins.the twist is you then offer better featured versions of your
products at higher prices (and margins) for less price sensitive costumers.

6.Subscriptions Pricing

- Is a business model where a customer must pay a subscription to have access to a product or
service.

Netflix, Spotify and Amazon web services are all subscription and recurring revenue business models.

3 MOST POPULAR SUBSCRIPTION MODELS

1. FLAT RATE MEMBERSHIP

- Single product offering fixed price per month and a set of features.

Ex. Netflix

2. TIERED MEMBERSHIP

- Offer multiple packages with a combination of different product features and pricing options.

Ex. Spotify

3. HYBRID MEMBERSHIP

- A Combination of both flat rate subscriptions and the ability to purchase content for a one time free.

Ex. Amazon Prime Video

HOW TO PRICE YOUR SUBSCRIPTION SERVICE IN 5 STEPS

1. Research your market

Some questions you have to ask yourself:

- What are your competitors offering and what are they charging for their services?

- What is the average cost of similar services in your niche?

2. Define your revenue goals

3. Evaluate your cost factors

4. Conduct audience research

5. Put it all together

7. PRICING

CUSTOMER LIFETIME VALUE

-The total amount of money a customer is expected to spend with your business,or on your products
during the lifetime of an average business relationship.

Why Is Knowing Your Customers’ Lifetime Value Important?

Understanding the LTV of your customers can provide valuable insights to help you run your business
more effectively and profitably. Here are a few examples.

8.Yield Management

What is yield management?

- Yield Management refers to a flexible pricing strategy that is based on insights, anticipation, and
influence over consumer behavior to increase the profit or revenue from time-limited and fixed
inventory of any product manufacturing companies or service-providing industries. It is a strategy based
on selling to the right customer at the right time, for the right price.

Purpose of Yield Management.

- Yield management focuses on finding the right balance of supply and demand to get the most bookings
at the highest prices. It helps you maximize room revenue and profitability.

Yield Management Formula:

*Yield Management=(Achieved revenue/Maximum potential revenue) × 100

For example:

If your hotel has 100 rooms available, with a full rate of $150 per room, the maximum potential revenue
is $15,000. If on particular night 70 rooms were sold at a lower average rate of $120, the achieved
revenue is $8,400. Therfore the yield percentage is 8400/15000×100 =56%