1 Pertemuan Kedelapanbelas Pricing Strategy

2 Uses of Price in Positioning Strategy Signal to buyer, the price is visible to the buyer and provides a basis of comparison between brands. Instrument of competition, price offers a way to attack competitors, or to position a firm away from direct competition. Improving financial performance Marketing mix considerations

3 Pricing Strategy for New and Existing Products Set pricing objectives: –Gaining market position –Achieve financial performance –Product positioning –Stimulate demand –Influence competition Analyze the pricing situation: –Product market responsiveness to price:

4 Analyze Pricing Situation Following questions must be answered: –How large is the product market in terms of buying potential? –What are the market segments and what market target strategy is to be used? –How sensitive is demand in the segment to changes in price? –What are the estimated sales at different price levels? –Price elasticity –Non price factors –Cost analysis –Competitor analysis –Legal and ethical considerations

5 Select pricing strategy Select pricing strategy: –How much flexibility exits? –Price positioning and visibility –Pricing strategy: High-active strategy High-passive strategy Low-active strategy Low-passive strategy

6 Determine Price and Policies –Cost-oriented approaches –Competition-oriented approaches –Demand-oriented approaches Pricing policy: –Pricing structure –Price segmentation –Distribution channel pricing –Price flexibility –Product life cycle pricing

7 Conclusions Pricing strategy for new and existing products includes: –Setting pricing objective, analyzing the pricing situation, selecting the pricing strategy and determining prices and policies. The choice of a pricing strategy includes consideration of price positioning and visibility.