Please enable JavaScript.
Coggle requires JavaScript to display documents.
Pricing strategies and tactics (INTRODUCTION (Companies Focus is on…
Pricing strategies and tactics
INTRODUCTION
Companies Focus is on Promotion and Production. Product
SKIMMING
Setting a high price in the intro. Stage: large Profit Margin•Trendsetters –willing to pay the high price to own 1st.
PENETRATION
Setting a low price in the into. Stage: Goal create demand•Most effective for products w/ elastic demand
GROWTH
Characterized by:•Increasing sales and Profits•Focus on consumer satisfaction •Competition increases•Modifications begin
Cost per item drops due to increased sales
Price changes depend on how the price was set in the introductory stag
If skimming pricing was used in the introductory stage, the price and sales should be closely monitored for a decline in sales; then price will fal
MATURITY
Characterized By: •Sales level off •Profits drop
•Competition heavy •Target market owns •Marketing dollars used fighting off competition •Do you continue to Modify product
DECLINE
Characterized by:•Profits could be Smaller than cost.
Choices:Drop product Sell / license prdtRegionalize prdtModernize prd
Sales decrease and profit margins decline
Price Discounts evident for the product to compete in discount stores
