Pricing

Internal Factors Pricing Decisions Pricing Decisions External Factors Target Market Positioning Objectives Factors to Consider When Setting Prices

Marketing Objectives Marketing-Mix Strategy Costs Organizational Considerations Internal Factors Affecting Pricing Decisions

Marketing Objectives Marketing Objectives Survival Low Prices to Cover Variable Costs and Some Fixed Costs to Stay in Business. Survival Low Prices to Cover Variable Costs and Some Fixed Costs to Stay in Business. Current Profit Maximization Choose the Price that Produces the Maximum Current Profit, Cash Flow or ROI. Current Profit Maximization Choose the Price that Produces the Maximum Current Profit, Cash Flow or ROI. Market Share Leadership Low as Possible Prices to Become the Market Share Leader. Market Share Leadership Low as Possible Prices to Become the Market Share Leader. Product Quality Leadership High Prices to Cover Higher Performance Quality Product Quality Leadership High Prices to Cover Higher Performance Quality Marketing Objectives that Affect Pricing Decisions

Marketing-Mix Strategy Product Design and Quality Product Design and Quality Distribution Promotion Non-Price Factors Non-Price Factors Marketing Mix Variables that Affect Pricing Decisions

Market and Demand Competitors’ Costs, Prices, and Offers Other External Factors Economic Conditions Reseller Needs Government Actions Social Concerns External Factors Affecting Pricing Decisions

Minimizes Price Competition Minimizes Price Competition Perceived Fairness to Both Buyers and Sellers Perceived Fairness to Both Buyers and Sellers Sellers Are More Certain About Costs Than Demand Sellers Are More Certain About Costs Than Demand What is Cost-Plus Pricing and Why is it Popular?

Product Cost Price Value Customers Customer Value Price Cost Product Cost-Based PricingValue-Based Pricing

Setting Prices Sealed-Bid Company Sets Prices Based on What They Think Competitors Will Charge. Sealed-Bid Company Sets Prices Based on What They Think Competitors Will Charge. Going-Rate Company Sets Prices Based on What Competitors Are Charging. Going-Rate Company Sets Prices Based on What Competitors Are Charging. Competition-Based Pricing