LESSON 1: PRICING

TECHNIQUES
Successful food merchants are able to maintain a
strong turnover rate that decreases spoilage and
contributes to higher sales Whether the sell
prepared foods, pre-packaged goods or fresh
fruits and vegetables, effective pricing is the key to
increases sales and maximizing profits
The most effective food pricing strategies
are easy to maintain, encourage rapid
sales and maximize pricing through to
customer decision-making processes and
location dynamics
 PRICING TECHNIQUES
 Optional Product
Pricing
 Premium Pricing
 Captive Product
 Penetration Pricing Pricing
 Economy Pricing  Product Bundle
 Price skimming Pricing
 Psychological Pricing  Promotional Pricing
 Product line Pricing  Geographical Pricing
 Value Pricing
 Premium Pricing
Pricing: Use a high price where there is
uniqueness about the product or service This
approach is used where sustantial competitive
advantage exists Such a high prices are
charged for luxuries
How Premium Pricing Works?

Increase the
The price of goods
perceived quality Lead to more
and services are
of products and sales
fixed higher
brand image
 Penetration Pricing
The price charged for products and services is set
artificially low in order to gain market share Once this is
achieved, the price is gradually increased Penetration
pricing is a marketing technique for offering a product or
service at a reduced rate to better compete in the
industry It also allows a company to engage new
customers who may appreciate a discount
Examples of Penetration
Pricing
• Internet and cable providers
• Cellphone suppliers
• Streaming companies
• Banking Institutions
• Hospitality Services
• Grocery stores
• Airline comapnies
• Product manufacturers
• Clothing retailers

 Economy Pricing
This is a no-frills low price The cost of
marketing and manufacturing are kept
at a minimum Supermarkets often have
economy brands for soups, spaghetti,
and etc
 Price Skimming
Charging a high price because of substantial
competitive advantage, however, the advantage is
not sustainable The high price tends to attract new
competitors into the market, and the price inevitably
falls due to increased supply
 Psychological Pricing
This approach is used when the marketer wants
the consumer to respond on an emotional, rather
than rational basis
For example: Price point perspective 99 99 not
100 pesos
 Product Line Pricing
Where here is a range of product or services that
the pricing reflect the benefits of parts of the
range
For example: Soda float, regular soda is ₱8 00
and the ice cream is ₱15 00, and the whole float
is ₱23 00
Optional Product Pricing
Companies will attempt to increase the
amount customer spend once they start to buy
Optional extras increase the overall price of
the product or service
For example: The toys in a meal like happy
meal and jolly meals
 Captive Product Pricing
Where the products have complements,
companies will charge a premium price where
the consumer is captured
For example: Sundae, a machine company will
offer menu boards fitted to the machine
 Product Bundle Pricing

Here, sellers combine severals products in the

same package This also serves to move old
stock For Large box of vanilla milk with free small
sachet of chocolate milk
 Promotional Pricing
Pricing promote a product is a
very common application In
shorts words: Buy one take one
free
Geographical Pricing
Geographical pricing is evedent where
there are variations in price in different
parts of the world For example: Rarity
value, or where shipping costs increase
price
 Value Pricing
This approach is used where external
factors such as recession or increased
competition companies are forced to
provide value for products and services
to retain sales
 ANOTHER
PRICING
TECHNIQUES
 Competitive Pricing
Competitive pricing is a strategy
where a product's price is set in
line with competitor prices A real-
life example is Amazon's pricing of
popular products
 Three Approaches with
competitive pricing strategy

1. Co-operative pricing
2. Aggressive Pricing
3. Dismissive Pricing
THANKS FOR
LISTENING!
BY: QUEEN DANICA M. DELAN