CHAPTER 11: PRICING STRATEGY

OBJECTIVE
 New product Pricing Strategy
 Product Mix Pricing Strategy
 Price Adjustment Strategy
 Price Changes
 Public Policy & Pricing

1. New product Pricing Strategy

2 strategies can be choosen:
Market-skimming pricing ( price skimming)
 Seting a high price for a new product to skim revenues layer by layer from the
segments willing to pay the high price
 The companies make 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 maket share

2. Product Mix Pricing Strategies

 Product line Pricing setting the price steps between various products in a
product line based on the difference about the cost of production, customer
evaluation, competitors’ price.
 Optinal-product Pricing setting a price for optinal or accessory products
along with a main product.
 Captive-product Pricing setting a price for a product that must be used with
the main product.
 By-product Pricing setting a price for a by-product to offset the costs of
disposing of them ; make the price of the main product more competitive.
 Product bundle Pricing combining several products & offering the bundle at
a reduced price.

3. Price Adjustment Strategies