understanding pricing
DESCRIPTION
Marketing 6621TRANSCRIPT
UNDERSTANDING
PRICING
Amount at which a good/service
will be sold in a market.
What is
PRICING Method used by a company
to set the price for a
product/service.
What is
PRICING Throughout most of histor y
prices were set by negotiat ion
between buyers and sel lers.
A brief history of
This was done through
bar tering.
BARTERING
What is
BARTERING The exchange of goods/services
for other goods or services
without using money.
What is
Money/currency gave people
other methods to pay for
goods and services.
How Companies Set Their
Setting the
RIGHT
PRICE b a s e d o n v a r i o u s f a c t o r s
1. Establish pricing goals
2. Estimate demand, costs, and profits
3. Choose a price strategy
4. Fine tune with pricing tactics
5. Results lead to the right price
Pricing Objectives
1.Profit-oriented pricing objectives
2.Sales-oriented pricing objectives
3.Status-quo pricing objectives
Profit-oriented
Setting prices for your products that
will guarantee you'll make money on
each sale.
Pricing Objectives
Sales-oriented
Setting prices for your products that
will guarantee a specific level of
sales volume.
Pricing Objectives
Status-Quo
Setting prices for your products that
will maintain current price levels or
meet the price levels of the
competition.
.
Pricing Objectives
Pricing Strategy
A basic, long-term pricing framework,
which establishes the initial price for a
product and the intended direction for
price movements over the PLC.
What is a
SPECIAL
PRICING
TACTICS
Single Price
All goods offered at the same
price to all customers
Flexible Price
Price will vary for each customer
Lead Pricing
Selling the product at near
or below cost
Bait Pricing
False/misleading price used
to the lure customers to the
product.
Price Bundling
Combining two or more
items for a single price
Two Part Pricing
Two separate payments
required for one product.