Pricing Strategies

Chapter 14
A change in pricing environment
- price – a major determinant of buyer choice
Instant price comparisons
Name their price and have it met
Get products free
How companies price
Pricing department
Feedback from product specialist
Final pricing by finance and marketing
Consumer psychology and pricing
Reference price
Price quality inference
Price cues – should end with 0/5/9
- Demand increases for a dress, 3439 not 3444
Process from left to right
The word sale increases demand
Pricing method
Mark up pricing
Perceived Value pricing
Value pricing (EDLP and High Low pricing)
Going rate pricing
New product pricing
Market skimming pricing
Market penetration pricing
Promotional pricing- to stimulate early
purchase
Loss leader pricing
Special event pricing
Special customer pricing
Cash rebates
Low interest financing (instabuy)
Psychological discounting
Warranties and service contracts
Differentiated pricing
Price discrimination
Customer segment pricing
Product form pricing
Image pricing
Channel pricing
Location pricing
Time pricing
Yield pricing
Is lowering price good?
Low quality trap
Fragile mkt share trap
Price war trap