Developing

Pricing Strategie

s

3of 5

How should a company

adapt prices to meet varying

circumstances and

opportunities?

Companies usually do not set a

single price

Rather they

develop a pricing

structure

These structures reflect variations in geographical demand and cost, market segment requirements and

other factors.

Geographical PricingHow to price in different locations

and countries?

Considering shipping costs, exchange rates.

When buyers lack sufficient funds , they offer other items in payments known as Countertrade

Forms of CountertradeBarter

Compensation Deal – part cash part products

Buyback – partial payment from products manufactured from supplied equipment

Offset – full payment in cash but a substantial amount of money to be spent in that country

Discounts

&Allowances

Used as a tool to close deals.But should not be encouraged as

norm.

Promotional Pricing

@Loss Leader Pricing

Supermarkets often drop prices on well known brands to simulate traffic

@Special Event Pricing

@Special Customer

Pricing

@Cash

Rebates

@Low Interest

Financing

& @Longer Payment

Terms

@Warranties & Service Contracts

@Psychological Discounts

Differentiated Pricing

First Degree Discrimination - Separate price depending of intensity of demand

Second Degree Discrimination - Less charges to buyers of larger volumes

Third Degree Discrimination – Different prices for different classes of buyers

Third Degree Discriminatio

n Types

@Customer Segment Pricing

@Product Form Pricing

@Image Pricing

@Channel Pricin

g

@Location Pricin

g

@Time Pricing

Created by Ronak Jain, NIT Surat, during an internship by Prof. Sameer Mathur,

IIM Lucknow.

www.IIMInternship.com