THE PRICING

M a r k e t p r i c i n g
 S U M M A RY
THE IMPORTANCE OF A
PRICING IN GENERAL DEATAILED PRICE
 price and pricing 01 02
 The importance of having a
 The objective of pricing detailed price

P T  The importance of price in sales

FACTORS THAT
F P PRICING STRATEGIES AND THEIR
AFFECTION
INFLUENCE PRICING
03 04  Major starigeis of
 Factors that influence the price pricing
 Tips to control those factors  The adventages and the
disadventages of each strategy
 -Introduction-
After discussing all the previous 5 topics, it is our turn to shed light
on pricing which is considered one of the most important things
that show the fate of the business and to clear things up , today ;
me and my teammates we’re going to explain

1. What is price ?

2. What is the importance of a detailed pricing ?

3. What is pricing structures and methods ?

Chapter One
• WHAT IS PRICE
Price is the amount of money that
a buyer agrees to pay for a product
or service
$350
• WHAT IS PRICING
Pricing is the process of determining what a
company will charge for its products or
services
Pricing involves considering a range of factors,
including costs, demand, competition, and
business goals. Effective pricing is important
for a company's financial success and for
building customer relationships
 THE OBJECTIVES OF PRICING

Maximizing profits:
Managing demand: Setting prices that are high enough
Setting prices that reflect the perceived to cover the costs of production and
value of the product or service to distribution, as well as generate a
customers. reasonable return on investment.

Attracting customers: Communicating value:

Offering lower prices than Prices that help customers
competitors or promotions and understand what they are
discounts getting for their money.

Influencing customer behavior: Differentiating from competitors:

Setting prices that encourage Setting prices that are significantly
customers to make a purchase or different from what other companies
offering incentives or rewards for are charging.
certain purchases.
Chapter Two
THE IMPORTANCE OF THE PRICING IN MARKETING

Firstly, A detailed price

helps customers
understand the value of
what they are. it can
also help customers
compare prices with
other options, which can
be particularly useful if
they are trying to find
the best deal.
THE IMPORTANCE OF THE PRICING IN MARKETING

Pricing can affect

consumer perception
of value. Consumers
often associate a higher
price with a higher level
of quality, so setting a
higher price may help a
business communicate
the value of its
products or services to
potential customers
 THE IMPORTANCE OF THE PRICING IN MARKETING

Pricing can influence

consumer behavior and
decision-making. For
example, offering discounts
or promotions can
encourage consumers to
make a purchase, while
setting a higher price may
deter some consumers
from buying.

Overall, pricing plays a crucial role in the success of a business by helping to generate revenue and
profits, communicate value to consumers, and influence consumer behavior
IN
SALES
Price is an important factor in sales
because it can affect a customer's
decision to purchase a product or service,
as well as the perceived value of the
product. Companies may use different
pricing strategies to encourage sales and
increase demand.
For example
when setting the price for a
premium brand of coffee, a
company needs to consider the
value of the product and what
customers are willing to pay, as
well as the competition in the
market. If the price is too high,
potential customers may choose a
lower-priced option, while if the
price is too low, customers may
perceive the product as low
quality. To make the most sales,
the company needs to find a price
that reflects the value of the
product and is competitive with
other options on the market.
 we can just summarize all the
previous infos in 5 simple points

1. Understand the value of what they are

purchasing
2. Make informed decisions about whether to
make a purchase
3. Compare prices with other options and find
the best deal
4. Understand the full cost of their purchase,
including any additional fees or charges
5. Take advantage of any discounts or
promotions that may be available
Chapter Three
THE FACTORS
THAT INFLUENCE
THE PRICING
Pricing is influenced by several
factors, including the cost of
production, competition, market
demand, brand reputation, quality, and
target customer segments.
Companies must consider these
factors when setting prices in order to
achieve profitability and remain
competitive.
 6 IMPORTANT FACTORS
1. QUALITY
Higher quality products or services may be
more expensive due to the additional
time and resources required to produce
them.
3. BRAND
Products or services from well-known and
reputable brands may be more expensive
due to the perceived value associated
with the brand
5. LOCATION
products or services may be more
expensive in urban areas due to higher
costs of living and doing business.
2.COST OF PRODUCTION
The cost of producing a product or
providing a service can have a significant
impact on its price. This includes the cost
of materials, labor, and other overhead
expenses
4. DEMAND
If there is a high demand for a product or service, the
price may be higher due to the increased demand.
Conversely, if there is low demand, the price may be
lower to attract more customers.
6. COMPETITION
If there are many competitors offering
similar products or services, prices may be
lower in order to attract customers.
 TIPS TO CONTROL
THOSE FACTORS
Cost management: Identifying and reducing unnecessary
expenses, negotiating better prices for materials and supplies

Demand management: Using marketing and promotional efforts

to increase or decrease demand

Competitive analysis: Understanding the competitive landscape

and monitoring competitors' pricing strategies

Quality control: Ensuring the quality of a product or service to

justify a higher price and differentiate from competitors

Brand management: Building and maintaining a strong brand

reputation to charge a premium price

Location management: Choosing a strategic location to control

costs and affect pricing.
Chapter four
PRICING STRATEGIES
Pricing strategies are the tactics that companies use
to determine the price of their products or services.
These strategies can be designed to achieve a
variety of business objectives, such as maximizing
profits, increasing market share, or targeting a
specific segment of the market.
1 Competition
based pricing
Competition-based pricing is a strategy in
which a company adjusts its prices based on
the prices of its competitors in order to
remain competitive and attract customers.
The company may set its prices lower or
higher than its competitors' prices, depending
on its goals and the level of competition in
the market. The aim of competition-based
pricing is to offer competitive prices in order
to attract customers.
•EXAMPLE
One example of competition-based pricing can be seen
in the fast food industry. For instance, McDonald's and
Burger King are two major competitors in the fast food
market. These two companies often engage in
competition-based pricing, setting their prices for menu
items based on what the other company is charging.

For example, if Burger King raises the price of its burgers,

McDonald's may choose to raise the price of its burgers as
well, or it may decide to keep its prices the same and
potentially attract more customers. Similarly, if McDonald's
lowers the price of its burgers, Burger King may decide to
lower its prices as well in order to remain competitive
 free
2 Freemium
pricing
Freemium pricing is a pricing strategy in
which a company offers a basic product or
service for free, while charging a fee for
advanced features or additional services.
The goal of freemium pricing is to attract
a large number of users with the free
product, and then upsell a portion of those
users on the premium features or services.

premium
•EXAMPLE
One example of a company using freemium
pricing is the music streaming service Spotify.
Spotify offers a basic service that allows
users to listen to music for free, but with
advertisements.

Users can also pay a fee for a premium subscription, which allows
them to listen to music ad-free and access additional features such
as offline listening and higher quality streaming. By offering a basic
service for free, Spotify is able to attract a large user base, and
then generate revenue by upselling a portion of those users on the
premium subscription
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Listen to music
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Create playlists

Create playlists * Create playlists

lyrics * lyrics

Download-offline Download-offline
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3 Psychological
pricing

Psychological pricing is a pricing strategy

that takes into account the psychological
effects of certain price points on
consumers' perceptions of a product. The
goal of psychological pricing is to
influence the way that customers perceive
the value of a product, with the goal of
increasing sales.
•EXAMPLE
One example of psychological pricing on Amazon is the way that they
price their Amazon Basics brand products. These products are often
priced just below a round number, such as $9.99 instead of $10.00. This
technique, known as charm pricing, is intended to make the products
seem more affordable to consumers

Amazon also uses psychological pricing by offering

"lightning deals" or "deal of the day" promotions on select
products. These promotions often involve offering a
product at a discounted price for a limited time, which is
intended to create a sense of urgency and encourage
customers to make a purchase.
4 Skimming
pricing
Skimming pricing Skimming pricing is a pricing
strategy in which a business sets a high initial
price for a product or service and then gradually
lowers the price over time , This strategy is often
used when introducing a new product or service
to the market or when there are high fixed costs
associated with the product or service. Skimming
pricing is often used in conjunction with other
pricing strategies.
•EXAMPLE
One example of skimming pricing from a well-known brand is the launch of
the iPhone. When the iPhone was first introduced in 2007, it was priced at
$499 for the 4GB model and $599 for the 8GB model. These prices were
significantly higher than other smartphones on the market at the time, and
targeted early adopters and technology enthusiasts who were willing to
pay a premium for a revolutionary new product.

As the iPhone became more widely available and competitors

entered the market with similar devices, Apple gradually
lowered the price of the iPhone to appeal to a wider customer
base. Today, iPhones are available at a range of price points,
with entry-level models starting at around $400 and higher-end
models costing over $1,000.
5 Dynamic
pricing
Dynamic pricing is a pricing strategy in which
the price of a product or service is constantly
adjusted based on a variety of factors, such as
supply and demand, competition, and the
customer's ability to pay. The goal of dynamic
pricing is to maximize revenue by setting the
optimal price for a product or service in a given
market condition.
•EXAMPLE
Hotels: A hotel may charge higher prices for rooms on the
weekends or during peak tourist season, and lower prices
during slower periods. The price of a hotel room may also vary
based on factors such as the size of the room, the view, or the
amenities.

Airlines: An airline may charge higher prices for flights that

are in high demand, such as flights around holidays or to
popular destinations. The price of a flight may also depend
on the class of service, the time of day, and how far in
advance the ticket is purchased.
 Conclusion
Pricing is an important part of marketing and should consider
the cost of producing or delivering the product or service,
demand, competition, value to customers, and the chosen
pricing strategy. It is also important to be willing to adjust
prices as needed to maximize profitability and meet the needs
of both the business and customers.
 Sources
Pricing Strategy: Setting Price Levels, Managing Price Discounts and Establishing Price Structures
« by Kent B. Monroe.

"The Role of Price in Marketing" by Mark R. Uncles and Jagdip Singh

Price Fairness and Customer Satisfaction: An Empirical Study" by Güliz Ger and Bülent Küçük.

The Impact of Price on Perceived Quality and Purchase Intentions: A Meta-Analysis" by Rui (Juliet) Zhu and Ying
Fan.

"Pricing Strategies: A Marketing Approach" by Kent Monroe

"The Marketing Mix: A Review and Critique" by Neil Morgan and Alain Jousten

"Marketing and Pricing Strategies for New Products" by John R. Hauser and Frank M. Bass

"The Impact of Marketing Mix and Customer Perception on Purchase Decision" by Ali Raza, Muhammad Shoaib,
and Nida Batool

"The Role of Price in Marketing Strategy" by Kent B. Monroe