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19

Pricing Concepts

Professor Close

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Introduction to Pricing (1)

Pricing strategy (nothing you buy is priced

too high)

Definition: value given up for benefits fir

offers (fu!!y: good deal varies" real estate)

Positive: easiest #p$ to change" deterines

revenues

%egative: difficult to evaluate" different to gainadvantage

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Introduction to Pricing (&)

Pricing 'trategy (cont)

eference price: consuers* ideas of +hat

price #should$ be (,hat for gallon gas- CD-

.ovie-)

/le0ibility

dinistered prices /irs decide on price vs 2t3 (fluctuation is relatively

uncoon)

Channel conflict (.'P)

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Introduction to Pricing (4)

Pricing 'trategy (cont) /le0ibility

5ne price: sae price to all under sae conditions

/le0ibility: price differs by custoer" negotiation

Proble: dissatisfaction" searching for deals (te0ts) 6asier no+ tech (fre73 'hopper)

#%ae your price$ (Price8ine)

()

'oe disli2e (autos)

Custoer satisfaction

#abit$ foring (;3'3 autos)

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Priceline Coercial

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Pricing 5barea sales

.easureent is easy

Proble: ust have soe profit (large sales

profits"6astern airlines" dotcos)

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Pricing 5b

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?aco @ell Coercial

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Pricing 5b

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Pricing 5b

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Pricing 5b

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Pricing 5bspiffs>p33 etailer incentives for aggressive selling (target: sales

force) Fuestion: incentives

?radein: price reduction for old ites

'easonal: buy unpopular ties (storage"

heating oil)

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Payent ?ers

%et: full aount

Cash Discount: reduction to pay early

&>1E= net 4E: &J discount if paid +>in 1E days" full payent due in 4E (@IK ta2e any+ay)

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'uary

5b