Download - 12819
17-1
Pricing of Services
Three Key Ways that Service Prices Are Different for Consumers
Approaches to Pricing Services
Pricing Strategies that Link to the Four Value Definitions
ChapterChapter
1717
McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
17-2
Objectives for Chapter 17:Pricing of Services
Discuss three major ways that service prices are perceived differently from goods prices by customers.
Articulate the key ways that pricing of services differs from pricing of goods from a company’s perspective.
Demonstrate what value means to customers and the role that price plays in value.
Describe strategies that companies use to price services.
Give examples of pricing strategy in action.
17-3
Pricing Quiz
Which dentist would you choose for a filling in your tooth?Dentist Cost for
FillingDistance to Dentist
Wait Period for an
Appointment
Time in Waiting Room
Anesthesia
A $50 15 miles 3 Weeks 1.5 hour None
B $75 15 miles 1 Week .5 hour Novocain
C $125 3 miles 1 Week 1 hour Novocain
D $200 3 miles 1 Week No wait Nitrous Oxide
& Novocain
17-4
Customer Often Lack of Knowledge of Service Prices
Customers often lack reference prices for service
Service variability limits knowledgeProviders are unwilling to estimate prices Individual customer needs varyCollection of price information by customers
is difficult Prices are not visible
17-5
The Role of Non-monetary Price
Time costs Search costs Convenience costs Psychological costs
Do you trade time for money?
17-6
Price as an Indicator of Service Quality
Can price attract somecustomers?
17-7
Price as an Indicator of Service Quality
Infers Low Quality Service
Infers High Quality Service
17-8
Three Basic Marketing Price Structures and Challenges for Services
17-9
A Customer-Focused Approach to The Pricing Process
17-10
Four Customer Definitions of Value
17-11
Pricing Strategies When the Customer Defines Value as Low Price
17-12
Pricing Strategies When the Customer Defines Value as Everything Wanted in a Service
17-13
Pricing Strategies When the Customer Defines Value as Quality for the Price Paid
17-14
Pricing Strategies When the Customer Defines Value as All that Is Received for All that Is Given
17-15
Summary of Service Pricing Strategies forFour Customer Definitions of Value