Transcript PRICING - AMITY GLOBAL BUSINESS SCHOOL

PRICING
Company earns revenues by charging a price from
buyers .
Price: Value that the company expects to get from
customers in return of the product or the service the
company is providing to the customer.
Pricing should not be treated in isolation.
Blend with other elements of marketing strategy to
form a coherent mix that provides superior customer
value
Price part of positioning strategy since it sends quality
cues to customer
NEW PRODUCT PRICING
STRATEGIES
Market-Skimming Pricing:
– Setting a high price for a new product to
skim maximum revenues layer by layer
from segments willing to pay the high
price.
Market-Penetration Pricing:
• Setting a low price for a new product
in order to attract a large number of
buyers and a large market share.
PRODUCT MIX PRICING
STRATEGIES
WHAT IS PRODUCT MIX ?
The variety of product lines that a
company produces or that a retailer
stocks. It is sometimes called “Product
Assortment”.
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Product Line Pricing
Setting price steps between
product line items.
Optional-Product Pricing
Pricing optional or accessory
products sold with the main
product
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By-Product Pricing
Pricing low-value by-products to
Cover the cost of storing and
delivering them.
Product Bundle Pricing
Pricing bundles of products sold
together
Price Adjustment Strategies
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Discount / allowance
Segmented
Psychological
Promotional
Geographical
International
PRICE CHANGE
• Companies often face situations in which
they must initiate price changes or
respond to price changes by competitors.
• Initiating Price Cuts
Initiating Price Increases