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Pricing Products: Pricing Considerations, Approaches, and Strategy
Pricing Products: Pricing Considerations, Approaches, and Strategy
Pricing
Products:
Pricing
Considerations,
Approaches,
and Strategy
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
“The real issue is value, not
price.”
-Robert T. Lindgren
• Costs
– Fixed vs. Variable Costs
• Organizational Considerations
©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,andandMakens
Makens
External Factors Affecting
Pricing Decisions
• Market and Demand
• Value-Based Pricing
• Competition-Based Pricing
Cost
Cost
Price
Price
Value
Value
Customers
Customers
©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,andandMakens
Makens
Break-even
Value
Value
Price
Price
Cost
Cost
Product
Product
Cost
Price
Value
Customer
©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,andandMakens
Makens
Pricing Strategies
• New-Product Pricing Strategies
• Psychological Pricing
• Promotional Pricing
©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,andandMakens
Makens
New-Product
Pricing Strategies
• Prestige Pricing
• Market-Skimming Pricing
• Market-Penetration Pricing
• Reference prices
• Rounding
– Value Pricing
• Price Points
• Excess capacity
• Dominate market
• Increase profits
• Cost inflation
• Excess demand
• Buyer’s reaction
• Competitor’s reaction
• Cross-selling
• Discriminatory pricing
• Fixed costs
• Going-rate pricing
©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,andandMakens
Makens
Key Terms
• Price
• Survival
• Upselling
• Value-based pricing
• Yield management/Revenue
management