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pricing - Coggle Diagram

- - - - product development
      - product locations (cost of production inputs)
      - firm positioning
      - market entry modes
      - country of origin
      - competitive strategy
      - corporate and marketing objectives
    - - most important product features eg quality service etc
      - product positioning USP
      - place in product line
      - product cost structures
      - stage in PLC
  - - - currency fluctuations
      - inflation
      - business cycle stage
      - government influences and constraints eg import controls and taxes
    - - customers ability to pay
      - nature of comp
      - compeititors objectives strategies and S and Ws
      - customer perceptions eg needs and tastes
      - grey market appeal
- - - - auction mechanism
      - negotiated price mechanism
      - fixed price mechanism
- - - - floor price
      - mark-up price
      - breakeven price
      - target price
    - - easy calculation
      - low risk
      - price covers cost
    - - not related to market demand
      - may not be consistent with brand image
      - doens't consider competitors
      - not related to PLC stage
    - - achieve a spefici ROI
      - ensure early recovery of cash otherwise investments made for market entry
  - - - test marketing and experimental pricing research
    - - usual in industrial markets eg lower set up or running costs
    - - stabilise competitive positions within market
      - skim most profitable business
      - penetrate market by adopting aggressive strategy to increase market share
  - - - benchmarking (eg financial services)
    - - same price and undifferentiated commodities
      - eg coffee beans
    - - tenders and sealed bids
      - auctions
      - eg NHS contracts
    - - simple and easy to use
      - easy if costs are difficult to measure
      - thought to reflect industry's collective wisdom
    - - fails to consider differential advantage
      - risk where cost position is weaker than its competitors
    - - reflect difference in perceived value and performance of comp products.
      - meet and follow comp.
      - maintain and improve market position
      - prevent or discourage new market entrants
- - - - Pricing Strategies
- - - - target market understands quality and uniqueness and how premium price reflects
      - customer knowns owning premium enhances image
      - other in social will admire owner
      - no competitors to challenge prem. price
      - products represents significant tech. advancement
  - - - large target market and potential for growth
      - lots of competitors
      - customer brand loyalty is low
      - the pridyct/quality relationship in cust. minds is weak
- - - - emphasis on price and match or beat competitors
      - company should be a low cost producer of the offering
      - often tend to produce standardised products
      - offers a marketer flexibility to alter prices frequently
      - examples: Ryanair and lidl/aldi - sainsburys price match
- - - - achieve similar positioning in different markets by adopting largely standardised pricing
      - maximise profitability by adapting prices to different market conditions
    - - applies in all markets
      - low risk strategy
      - seeing a fixed world wide price
      - no attempt to respond to local conditions
      - may be appropriate if selling to large companies in outlets
      - helps present a consistent price based image
    - - allows local subsidary/partner to set a price they deem appropriate
      - can reflect negatively on company image
      - lack of HQ control
      - may encourage parallel importing
      - no attempt to coordinate prices
- - - - total estimated cost of producing, managing and marketing within a profit margin
    - - exchange rate fluctuations
      - inflation
      - economic and political uncertainty
      - changing consumer tastes
      - nature of competition