PRICING

Pricing objectives or goals give

direction to the whole pricing process.
When deciding on pricing objectives one
must consider:
1)the overall financial, marketing, and
strategic objectives of the company;
2) the objectives of your product or
brand;
3)consumer price elasticity and price
points; and
4) the resources you have available.
1. Profits-related Objectives
i. Maximum Current Profit
ii. Target Return on Investment
2. Sales-related Objectives
i. Sales Growth
ii. Target Market Share
iii. Increase in Market Share
3. Competition-related Objectives
i. To Face Competition
ii. To Keep Competitors Away
iii. To Achieve Quality Leadership by
Pricing
iv. To Remove Competitors from the
Market
4. Customer-related Objectives
i. To Win Confidence of Customers
ii. To Satisfy Customers
5. Other Objectives
i. Market Penetration
ii. Promoting a New Product
iii. Maintaining Image and Reputation
in the Market
iv. To Skim the Cream from the Market
v. Price Stability
vi. Survival and Growth
 Different Types of Pricing
Strategy
Premium Pricing
Penetration Pricing
Economy Pricing
Price Skimming
Psychological Pricing
 PRICING POLICY
Pricing policy refers to the way a
company sets the prices of its
services and products basing on their
value, demand, cost of production
and the market competition. Pricing
policy is essential for all companies
as it provides a guideline for creating
profits and areas that bring in losses
 CONSIDERATIONS INVOLVED IN
FORMULATING THE PRICING POLICY

(i) Competitive Situation

(ii) Goal of Profit and Sales
(iii) Long Range Welfare of the Firm
(iv) Flexibility
(v) Government Policy
(vi) Overall Goals of Business
(vii) Price Sensitivity
(viii) Routinisation of Pricing
FACTORS INVOLVED IN PRICING
POLICY
(i) Cost of Goods Sold
(ii) Demand Factor
(iii) Consumer Psychology
(iv) Competition
(v) Profit
(vi) Government Policy
 METHODS OF PRICING
COST-ORIENTED MARKET-
METHODS OR ORIENTED
PRICING METHODS
Cost plus pricing: Perceived value
Mark-up pricing: pricing:
Going-rate pricing:
Break-even pricing:
Sealed-bid pricing:
Target return
pricing: Differentiated
Early cash recovery pricing:
pricing: