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MKT Part 5 - PRICE (Pricing Framework (Set Pricing Obj, Estimate demand,…
MKT Part 5 - PRICE
Pricing Framework
Set Pricing Obj
Estimate demand
Determine cost
Analyze factors affecting pricing decision
Determine PRICING STRA & POLICIES for making adjustment
Set Initial Price
Offer & Alter price if needed
Price ?
Money charged for product or services
it is what produceS REVENUE
Major Pricing Strategies
Value based
Customer driven
Process
Design Prd
Calc cost
calc price for Profit
Cost Based
Product driven
Strag
Good-value pricing
Type of cost
Variable
Fixed
Value - added pricing (markup)
Process
Assess cust need and perception
set price based on <- result
Determine costs can be occured
Design prod
Competitor based
Setting price based on competitors product
Operational Pricing Strategy
New Product
Market-skimming pricing
Set initial high price for high revenue
Works when:
Superior quality
Enough buyers for profit
Competitors cannot charge lower price
Make sense when:
Products quality and image must support its higher price
Cost of producing of smaller volume do nto affect the
Market-penetration pricing
Set initial Low price for high market share
Works when:
Market is price-sensitive
Costs fall with large volume
3.Low price helps to keep out competition
4.Low price can be maintained
Make sense when:
Highly sensitive to price.
Production and distribution cost HAVE TO FALL when volume increase
Low price must help keep out the competition and the company must maintain the low price
Product Mix
product line pricing
Setting price steps between product line items
Optimal product pricing
Pricing optional or accessory products sold with the main products
Captive product pricing
Pricing products MUST be used with main product
Product bundle pricing
pricing a bundle of product together
Price Adjustment
Discount
Segmented
Psychological
Dynamic
Promotional
Marketing $P
Price
Pricing Model
Promotion
Place
Distribution Channle
Product
Product Mix