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