CHAPTER 14: PRICETOM GERARD A. MIRANDA

#THEPRICEMUSTBERIGHT

• Sales is the only revenue driver.

• Pricing decisions are essential to drive the sales of a certain product.

#PRISIX: SIX-STEP PRICING PROCEDURE

• Selecting the Pricing Objective: Survival, Maximum Current Profit, Maximum Market Share, Maximum Market Skimming, Product-Quality Leadership

• Determining Demand: Price sensitivity of customers

• Estimating Costs: Fixed, Variable, Overhead costs

• Analyzing Competitors’ Costs, Prices, and Offers

• Selecting a Pricing Method: Mark up Pricing, Target-Return Pricing

• Selecting the Final Price

#ADAPTANDSTRATEGIZE

• Geographical Pricing: Selling price will depend for every territory.

• Price discounts and allowances

• Promotional Pricing: Special event, Cash rebates, Low-interest

• Differentiated Pricing: Different prices for various types of customers.

#GOINGUP!

• Price increases are caused by the following:

• Cost inflation

• Anticipatory Pricing

• Overdemand

#GOINGDOWN!

• Price decreases are caused by the following:

• Excess plant capacity: Sell more at a lower price

• Market share desire: Lower price to gain a slice of the pie

• Price-cutting might lead to the following consequences:• Low-quality trap

• Price-war trap

• Fragile-market-share trap

THANK YOU.