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Pricing Defined (Price adjustment (Discount and alloweance pricing…
Pricing Defined
Price adjustment
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Segmented pricing
this type of pricing adjustment allows the company price differently customers and in different location
Psychological pricing
- is an approach which considers the psychology of people not simply the cost of the product /most used in service
Promotional pricing
Loss lader pricing are mainly used by supermarkets markets an department stores to attract the customers
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Product mix Pricing
Product line pricing
set a base point of pricing, then different price sets/points on the similar range of product within a product line
Optional product pricing
set a base price for a product but offered a optional product for a extra price
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Price
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Pricing Objectives denote desires outcomes and preferred attest of affairs they represents goals, aims target and contribute to others goals are knows also as a secondary goals
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Price elasticity of demand
This question of how responsive consumers are to price changes involves the economic concept of elasticity
Measures how much consumers responds in their buying decisions to a change a price
- if the price e is increases and demand decreases that is responsiveness to elasticity
- if the price increases and remains practically unchanged that is the price is Inelasticity
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Major pricing strategies
Customer Value Based
is based on a belief that the optional price for a product or a service is a reflection of the value on a consumer perception in the product or service
Value based pricing reverses the way marketers have prepared their prices. It is started from assessing customer needs and value perceptions, it the determines the cost and finally doing the product that matches the desired value to a target price
Method 1 Good value based pricing this is perceived as a fair price which provides good and service and good quality
Method 2 Value-added pricing this is perceived to be offered at a higher price supported with added features and services
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New product pricing
Marketing skimming involves a relatively high price for a period of time when the product just came out or improved product
Benefits
-image of the brand
- good for early adopters
- allows to return the set up cost
- high markup
Penetration pricing involves the setting of low prices in order to achieve a large Often use by businesses wishing ro entire a new market or build on a relatively small market share
Benefits
- drive competitors out of the market
- it is a marginal cost to produce using this excess capacity is so low that it can afford to sustain the penetration pricing