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C7. PRICING STRATEGY - Coggle Diagram
C7. PRICING STRATEGY
Price?
is the amount of money cus. must pay to obtain the product
P = CPsx + %Profit
Price elasticity
What is it?
A measure of the sensitivity of demand to changes in price.
Price elasticity of demand = % change in quantity demanded/ % change in price
Pricing methods
COST-BASED PRICING
Cost-Plus Pricing (or Markup Pricing)
Break-even Pricing (or Target Return Pricing)
COMPETITION-BASED PRICING
CUS. VALUE-BASED PRICING
Good-Value Pricing
Value-Added Pricing
New-product Pricing Strategy
Market-Skimming Pricing Strategy
(Europe)
High price
Maximise "Profit"
Unique product, high technology, and amount of cus. willing to pay at that price
Market-Penetration Pricing Strategy
(Asia)
Low price
Popularise, recognize
New product, competitive product, and a lot of replaceable product.
Product Mix Pricing Strategies
Captive product pricing
: Pricing products that
must be used
with the main product
By-product pricing
:
Pricing low-value by-products
to get
rid
of them
Optional product pricing
: Pricing optional or accessory products
sold with
the main product.
Product bundle pricing
: Pricing bundles of products
sold together
Product line pricing
: Setting
prices
across
an entire product line