understanding pricing

UNDERSTANDING

PRICING

Amount at which a good/service

will be sold in a market.

What is

PRICING Method used by a company

to set the price for a

product/service.

What is

PRICING Throughout most of histor y

prices were set by negotiat ion

between buyers and sel lers.

A brief history of

This was done through

bar tering.

BARTERING

What is

BARTERING The exchange of goods/services

for other goods or services

without using money.

What is

Money/currency gave people

other methods to pay for

goods and services.

How Companies Set Their

Setting the

RIGHT

PRICE b a s e d o n v a r i o u s f a c t o r s

1. Establish pricing goals

2. Estimate demand, costs, and profits

3. Choose a price strategy

4. Fine tune with pricing tactics

5. Results lead to the right price

Pricing Objectives

1.Profit-oriented pricing objectives

2.Sales-oriented pricing objectives

3.Status-quo pricing objectives

Profit-oriented

Setting prices for your products that

will guarantee you'll make money on

each sale.

Pricing Objectives

Sales-oriented

Setting prices for your products that

will guarantee a specific level of

sales volume.

Pricing Objectives

Status-Quo

Setting prices for your products that

will maintain current price levels or

meet the price levels of the

competition.

.

Pricing Objectives

Pricing Strategy

A basic, long-term pricing framework,

which establishes the initial price for a

product and the intended direction for

price movements over the PLC.

What is a

SPECIAL

PRICING

TACTICS

Single Price

All goods offered at the same

price to all customers

Flexible Price

Price will vary for each customer

Lead Pricing

Selling the product at near

or below cost

Bait Pricing

False/misleading price used

to the lure customers to the

product.

Price Bundling

Combining two or more

items for a single price

Two Part Pricing

Two separate payments

required for one product.