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Price Adjustment Startegies (Discount and Allowance Pricing (Allowance is…
Price Adjustment Startegies
Discount and Allowance Pricing
Straight reduction of the price
Cash Discount - price reduction
Qty. Discount- price reuction due to buying in large volumes
Functional Discount- trade channel members who perform cetain tasks
Seasonal Discount- PRice reduction for out of season stuff
Allowance is promotional money paid by manu.
Trade-in allowances are price reductions given for turining in old items
Promotional allowance - payments for doing advertsising
Segmented Pricing
Diff customers pay diff prices
Customer segmented pricing- Diff ppl pay diff prices- aquarium give cheaper admission for kids
Product form pricing- diff versions of prod priced diff.- economy seats vs first class
Location bases pricing- charging diff prices for diff locales
TIme based pricing- Movie are cheaper on wednesdays and more expensive on weekends
Psychological Pricing- considders the pscyhology of prices and not the economy
Reference prices- prices that ppl have in their head are diff than reality
LAst time cheaper now more mahal
Promotional Pricing
Create excivtement and urge to buy
Discounts
Limited time offers
Low interest financing
Free maintainence
Downsides
Ppl will just wait till it goes on sale
Can erode a brands value
Only use as a quick fix and not long term startegies
Geographical Pricing
FOB ORigin pricing- Free On Board Carrier- COD basically
Uniform delivered Pricing- shipping costs
Zone pricing- more far more expensive
Basic point pricing- Everyone from that city pays a specific cost
Freight absorption pricing- seller absorbs part of the actual freight cost to get the desired business
Dynamic and online pricing
Adjusting prices to follow the users needs
Legal as long as they dont discriminate any group