group members: claudino juaquim laimi jeremia victoria shimweefeleni helena imbili ndapandula...
DESCRIPTION
Competition Competition-based pricing strategy Policies in competition based pricing Price setting process Steps in pricing procedures Brand leader responses to price cutsTRANSCRIPT
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GROUP 4TOPIC: COMPETITION
Group members:
Claudino JuaquimLaimi JeremiaVictoria ShimweefeleniHelena ImbiliNdapandula Efraim
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Presentation Outline Competition Competition-based pricing strategy Policies in competition based pricing Price setting process Steps in pricing procedures Brand leader responses to price cuts
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Presentation Outline cont… Price environment Reacting to price competition Market structure & pricing Non- price competition
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Competition
Competition: Rivalry Goals Increasing profits
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Competition-based pricing strategy
Definition Pricing their products in line with those of the competitors Checking on prices of competitors before pricing their own Same price, of slightly below
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Policies involved in competition based pricing:
Premium pricing Discount pricing Parity pricing Product line pricing
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Steps in Setting the price
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Steps involved in pricing procedures
Identify the target market
-Market position
-price imageDetermine
price elasticityProduct life
cycle
Competitor’s prices
Other environmental
factorsChoose pricing
methodConduct
periodic review
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Brand Leader Response to Competitive Price Cuts
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Price Environment
Price Environment Different type of environment: Market-controlled environment Company-controlled environment Government-controlled environment
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COMPETITIVE PRICING RELIES ON 3 FACTORS:
lasting distinctivenesslow cross elasticity and perishable distinctiveness
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Option for reacting to price competitions
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Options for reacting to Price competition
Competitor lowers price in homogenous market: Try augmenting the product Alternatively, meet the price cut head-on
( Copyright-Marketing institute of Singapore)
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Option for reacting to price competitions cont…..
If competitor raises price in non-homogenous market, evaluate:
Reason for price change If price change is temporary Effect on your market share & profit The likely responses from other competitors
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Market Structures
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Competition considerations: (monopoly)
One dominant supplier determine price without regard for competition Ability to increase or lower price without worrying about
competitors Price based on quality, demand, market structure etc.
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Competition considerations: (oligopoly)
Few firms small number of large suppliers. compete on a non-price basis Based on variables such as service quality
customer relationships or branding.
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Competition considerations: ( perfect competition)
large number of buyers and sellers High competition Price closely related or similar
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Competition considerations: (Monopolistic competition)
characterised by numerous competitors Similar but differentiated products e.g restaurant Price according to design, quality brand image and
product features the existence of intense price competition is evidence of
the lack of meaningful product differentiation.
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None-price competition
None-price competition Company tries to increase market share of its product
by: Not changing the price of the product/service But, by persuading the target customers of the
superiority or advantages associated with it.
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ACKNOWLEDGEMENTS: http://theorybiz.com/the-strategy-and-tactics-of-pricing/competition/1794-how-should-you-react.html(McConnell-Brue, 2002, p. 43.7-43.8).Marketing Institute of Singapore. Pricing Strategies for the Asia pacific. Retrieved from http://www.apmf.org.sg/Lt9--PricingStragsforASPAC.PPT)Raju, J. & Zhang, Z.J. (2010) Smart pricing: How Google, Priceline, and leading businesses use pricing innovation for profitability, 1st Edition, New York: Pearson EdCram, T. (2005). Smarter pricing: How to capture more value in your market, New York: Pearson Ed.
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Now lets get to the real deal… TEST TIME…
ALL THE BEST!
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Test
1. Name any 3 steps in setting price 2. Name the 4 policies involved in Competitive Based
Pricing 3. How do Marketers price their products in a Monopoly
Market? 5. How do Marketers price their products in a Perfect
competition? 6. What is meant by Non-price competition? 7. Define Competition and another name for it 8.Define competitive based Pricing