Chapter 7
Pricing: understanding and capturing customer value

What is price?

Price is the amount of money charged for a P or S, or the sum of the values that customers exchange for the benefits of having or using the P or S

MAJOR PRICING STRATEGIES

value-based pricing

cost-based pricing

customer value-based pricing

good-value pricing

everyday low pricing (EDLP)

high-low pricing

value-added pricing

fixed cost

variable cost

total cost

cost-plus pricing

break even pricing

competition-based pricing

FACTOR AFFECTING A FIRMS'S PRICING DECISIONS

Internal

External

company's overall marketing strategy

organization considerations

economic conditions

environmental factors

who should set the price?

who can influence price?

reseller response to price

marketing mix

the market and demand

pure competition

monopolistic competition

oligopolistic competition

pure monopoly

price elasticity of demand

inelastic demand

elastic demand

NEW PRODUCT PRICING STRATEGY

market skimming pricing

market penetration pricing

PRODUCT MIX PRICING STRATEGY

optional product pricing

product line pricing

captive product pricing

by-product pricing

product bundle pricing

PRICE ADJUSTMENT STRATEGY

segmented pricing

discount and allowance

customer-segment pricing

location-based pricing

time-based pricing

product-form pricing

psychological pricing

promotional pricing

geographical pricing

FOB-origin pricing

uniform-delivered pricing

zone pricing

basing-point pricing

freight-absorption pricing