Marketing’s Role in the Global Economy Chapter 13 Chapter One Marketing’s Role in the Global Economy Pricing Strategies For use only with Perreault and McCarthy texts. © 2002 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin

Marketing’s Role in the Global Economy Chapter Goals Chapter One Marketing’s Role in the Global Economy Price competition, value pricing Non-price competition Market entry pricing strategies, market skimming and market penetration Price discounts and allowances Geographic pricing strategies Special pricing situations Legal issues of pricing For use only with Perreault and McCarthy texts. © 2002 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin

Price Determination Process

Competition Price Non- Price Low Price Value Pricing Stable Price Emphasize other parts of marketing mix Non- Price

Non-Price Competition Shift in Demand Curve for skis

Market-Entry Strategies Market-Skimming Pricing Set a relatively high price Market-Penetration Pricing Low initial price

Discounts and Allowances Quantity Discounts Reductions based on size of purchase Trade Discounts Reductions based on buyer performing marketing functions Deductions based on paying within a specified time Cash Discounts

Parts of a Cash Discount

Discounts and Allowances E-coupons Rebates Coupons Promotional Allowances Seasonal Discounts

Robinson-Patman Act

Geographic Pricing Strategies Cost of Freight Point- of- Production FOB FACTORY Same Price Uniform Delivery

Geographic Pricing Strategies Zone-Delivered Freight- Absorption

Pricing Strategies $4.95 One- price Flexible- price Price lining Odd

Pricing Strategies Unfair Leader Practices pricing Acts High-Low Loss Leader High-Low pricing Everyday low price

Suggested retail price Pricing Strategies Consumer Goods Pricing Act Resale Price Maintenance Suggested retail price Reactive changes Price Wars Proactive Changes

Marketing’s Role in the Global Economy Key Terms and Concepts Chapter One Marketing’s Role in the Global Economy Strategy Price competition Value pricing Nonprice competition Market-skimming pricing Market-penetration pricing Predatory pricing Quantity discount Noncumulative discount Cumulative discount Trade (functional) discount Cash discount Rebate Price customization Seasonal discount Promotional allowance Price discrimination For use only with Perreault and McCarthy texts. © 2002 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin

Marketing’s Role in the Global Economy Key Terms and Concepts Chapter One Marketing’s Role in the Global Economy Robinson-Patman Act FOB factory (mill) pricing Uniform delivered pricing Zone-delivered pricing Freight-absorption pricing One-rice strategy Flexible-price (variable-price) strategy Flat-rate pricing Single-price strategy Price lining Odd pricing Leader pricing Leaders Loss leader Unfair-practices (unfair-sales) acts High-low pricing For use only with Perreault and McCarthy texts. © 2002 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin

Marketing’s Role in the Global Economy Key Terms and Concepts Chapter One Marketing’s Role in the Global Economy Everyday low pricing Resale price maintenance Suggested list price Price war For use only with Perreault and McCarthy texts. © 2002 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin