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.Setting a low price for a new product in order to attract a large number of buyers and a large market share.

3 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”. The variety of product lines that a company produces or that a retailer stocks. It is sometimes called “Product Assortment”.

4 Product Line Pricing Product Line Pricing Setting price steps between product line items. Setting price steps between product line items. Optional-Product Pricing Optional-Product Pricing Pricing optional or accessory products sold with the main product Pricing optional or accessory products sold with the main product

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 Discount / allowanceDiscount / allowance SegmentedSegmented PsychologicalPsychological PromotionalPromotional GeographicalGeographical InternationalInternational

PRICE CHANGE Companies often face situations in which they must initiate price changes or respond to price changes by competitors. Initiating Price CutsInitiating Price Cuts Initiating Price Increases Initiating Price Increases