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PRICING STRATEGIES
Price point of INR 5 has become a magic word for
marketers after the Coca Cola cam ai n.
Lower and middle class consumers now want to buy
packs of anything snacks, biscuits, chocolates,detergent bars, mobile calling cards, shaving blades
as long as they are available for five rupees.
Telecom players now offer INR 5 recharge plans.
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ARGET PRICING
Rural consumers conscious of value for mone
Tata Nano
Gillette Guardo Blade and a plastic handle costing Rs. 15/-
o Each replaceable blade costing Rs.5/-
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SETTING THE PRICE FOR RURAL
Cost Price to at least cover the total costs fixed
and variable costs).
For rural areas there should be sufficient funds forpackaging, promotion and distribution.
Promotional Costs
o e ev s on pene ra on s s owo Rural people want, touch and feel.
,
be used where in people turn in large numbers.
Distribution Costso HUL made investments in channels like Project
Shakti .
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PRICING OBJECTIVES OF THE
As there is a trade off between the quality on offer
,
positioning.
o Tata Swach was launched in 1980 for less than INR
1000.
o No electricity required.o Target customers are the 85% Indians who do not
er wa er.
Minimum Return on Sales Turnover .
Therefore pricing objectives need to cover
distribution, roduction and dealer mar ins.
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KEEPING UP WITH THE COMPETITION
Deeper penetration of the market Britannia
aunc e ger scu s a , an
price points.o In rural areas stiff competition to national players from
re ional and local la ers like Ghari Deter ent Wa h
Bakri Tea, Anchor toothpaste, Priyagold biscuits,Emami cosmetics, Parakh foods Maxo mosquito
repellent.
o Low production and distribution cost for the local
.
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PRICE SENSITIVITY OF CUSTOMERS
Self mana ed instalment scheme
Chic Shampoo
Ghari DetergentFena washing soaps
CHANNEL COSTSDistribution costs are important as there are
6,00,000 villages to be reached.
Retailers in the village has to extend credit
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COMPETITION
creates a pricing standard
define the competition
ENVIRONMENT
Government policies, change in the economy, andnew technology are the main factors affecting the
pr ce.o Poor monsoon and crop failure decreases purchasing
.
o Technology Godrej Chotukool, Nokias simple
handsets.
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PRICE SETTING STRATEGIES
Market Entry Strategieso Skimming Pricing - P&G introduced Ariel and Tide
and high prices
o Penetration Pricing Anchor white and Ajantaoo pas e
Product Mix Pricing Strategies - , ,
Videocon.
o Ca tive roduct ricin BSNL offered free telephone connections
ITC e Choupal levied no charges for extending Internet
o Product bundle pricingUsed by companies during festival and marriage seasons.
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Price adjustment strategieso Discounts and allowances
Cash discounts - retailers to be given enough margins so thatcash discounts can be given to the consumers
Quantity discounts Providing more quantity for the same
price good knight mosquito coil 1+1 scheme
o Freebies Tooth brush with toothpaste
Cup with tea
eg ona an oca ran s ave a vantage as t e r e verysystem ensures that the gift reaches the customer.
National players
Retailers replace the gift with an inferior one
Customers are ignorant
The gift is inserted in the main pack
Picture of gift printed on the pack of the core product
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Special Event Pricing
o Hero Honda Van campaignBookings against deposits of INR 500 and gave a watch free
.
o Economy Pricing
Frills are removedMaharaja sturdy Bonus Washing Machine priced at INR 2990
The machine has no drier
LG TV at INR 8000 (No golden eye, only 100 channels)
Escorts launched Rajdoot 223 at INR 33,3300. Cheaper thanother bikes.
Godrej No. 1 soap containing rose, sandalwood and neem
Ajanta vegetarian toothpaste at a low price
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RURAL SPECIFIC PRICING STRATEGIES
Low Price Pointso Help market penetration
o Low price packs maintain freshness
o Customer have more choiceo ara pe ro eum n ro uce g m n gas cy n ers
priced at INR 100 to reduce initial deposits and refill costs
.
o Godrej Selling Expert hair colour and Nupur Henna at INR5 and INR 10.
o Nestea @ 2 and 10
o CavinKare sells Nile and Chik shampoo at 50 paise andpac s
o Frito lay and Kurkure at 3 and 5
.
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Low cost packaging Britannias Tiger Biscuits
Refillable/Reusable packso Fertilisers in refillable packs
o Hero Honda highlighting mileage, lower maintenance
,
Coinage Pricingo Coca Cola, Pe sodent, Ponds Dream flower, Ponds
Cold Cream, Rin, Taaza, Fair and Lovely, Clinic Plus,Lux
ro uc ar ng erv ceso HPCL Rasoi Ghar Model
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