Chapter 9: Pricing Objectives and Policies

Slides:



Advertisements
Similar presentations
Chapter 13 Pricing concepts
Advertisements

Pricing Concepts Setting the Right Price
Pricing Strategies and Determination
Chapter 20 Setting the right price
Chapter 14 Pricing Strategies and Tactics
Setting the Right Price
Foundations of Chapter M A R K E T I N G Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Managing the Pricing Function 14.
Objective 5.02 The Price Strategy.
For use only with Perreault/Cannon/McCarthy or Perreault/McCarthy texts. © 2008 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Pricing.
Setting the Right Price
PRICING PRODUCTS AND SERVICES
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 14-2 ARRIVING AT THE FINAL PRICE C HAPTER.
McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Chapter 30 – Pricing Strategies
Marketing Management Dawn Iacobucci
Chapter foundations of Chapter M A R K E T I N G Managing the Pricing Function 14.
Principles of Marketing
For use only with Perreault/Cannon/McCarthy or Perreault/McCarthy texts. © 2008 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Pricing.
Chapter 18 Setting the right price. Steps in Setting the Right Price Results lead to the right price Fine tune with pricing tactics Choose a price strategy.
© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Steps in setting price.
Chapter Twelve Pricing Strategies.
Principles of Marketing
PowerPoint Slides to accompany Rix Marketing: A Practical Approach 7e
For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Chapter 17: Pricing Objectives and Policies.
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
The Marketing Mix Price
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Chapter 19 Pricing Strategies.
Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter chapter 15 Prepared by Angela Zigras, Seneca College Deborah Baker,
Pricing Objectives and Policies
Copyright 2000 Prentice Hall13-1 Chapter 13 Pricing Methods.
Chapter 17/18 Pricing / Pricing Strategies Describe typical company pricing objectives Discuss Market Share vs. Sales Review Break-Even Analysis Skimming.
Pricing Strategies Chapter 26.1
For use only with Perreault/Cannon/ McCarthy texts, © 2009 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Chapter 17 Pricing Objectives and Policies
12-1 Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: Creating and Delivering Value 5e, by Quester, McGuiggan, Perreault McCarthy By.
For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw-Hill Chapter 16: Pricing Objectives and Policies.
Principles of Marketing Lecture-26. Summary of Lecture-25.
Price.  Price is what is charged by the supplier to the consumer  Can be a deciding factor in a consumer choosing your product over you consumers 
Lamb, Hair, McDaniel Chapter 20 Setting the Right Price © Cengage Learning All Rights Reserved.
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Pricing Strategy and Determination. LEARNING OBJECTIVES Define price and explain why cost-based pricing methods are used so widely, despite their drawbacks.
For use with Shapiro, Wong, Perreault, and McCarthy texts. Copyright © 2002 McGraw-Hill Ryerson Limited. Chapter 17: Pricing Objectives and Policies.
Chapter 17 Pricing Objectives and Policies. Pricing Strategy Determines 1] How flexible prices will be 2] At what level prices will be set over the Product.
CHAPTER 19 - Pricing Strategies. PRICING STRATEGIES 1. SKIMMING –involves use of relatively high price compared to competitor prices ie. New drug. 2.
Dr. Muslim Suardi, MSi., Apt.
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin ARRIVING AT THE FINAL PRICE 14 C HAPTER.
BA 590 Module 2 Customer Needs. Key Terms Model of Buyer Behavior PSSP Pyramid Problem Solving Purchase Situation Organizational Buyer Needs.
Chapter 17 Pricing Objectives and Policies. Pricing Strategy Determines 1] How flexible prices will be 2] At what level prices will be set over the Product.
1 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 14 Pricing Concepts Prepared by Deborah Baker Texas Christian.
For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER SIXTEEN CHAPTER SIXTEEN.
Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 12–1 Part 3: The marketing mix Chapter.
Copyright © 2007 Pearson Education Canada 11-1 Psychological Pricing Appeals to tendencies in consumer behaviour.  Prestige Pricing  Odd-Even Pricing.
Marketing & Sales – 3rd Hour
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 15 Ver 2e1 Chapter 15 ©2000 South-Western College Publishing Pricing Concepts Prepared by Deborah Baker Texas Christian University.
How do I price my product?. Pricing Price – The value in money (or equivalent) placed on a good or service. Value – based on anticipated satisfaction.
Pricing Mark Fielding-Pritchard mefielding.com 1.
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Part 7: Pricing Decisions 18.Price Concepts and Approaches.
Entrepreneurship CHAPTER 11 SECTION 1.  To stay in business, you must make a profit.  Costs and expenses can be fixed or variable: 1.Fixed costs – do.
BUSI 406 PRINCIPLES OF MARKETING: PRICING OBJECTIVES AND POLICIES.
Pricing Understanding and Capturing Customer Value
MGT301 Principles of Marketing
Marketing Channels Bluefield College October 26, 2010.
Chapter 10 Pricing Strategies
Chapter 19 Pricing Strategies.
Marketing’s Role in the Global Economy
Pricing Strategies.
Pricing Products: Pricing Considerations and Strategies
Pricing Concepts.
Pricing Products: Pricing Considerations and Strategies
Price Strategy Considerations
Presentation transcript:

Chapter 9: Pricing Objectives and Policies

Pricing Chapter objective What is price? Strategic dimensions Legal issues affecting pricing policies

Chapter objectives Understand how pricing objectives should guide strategic planning Understand choices the marketing manager must make about price flexibility and price levels over the product life cycle Understand the many possible variations of a price structure Understand some of the legal issues affecting pricing

Price Price : The amount of money that is charged for something of value. Prices are how much someone is willing to pay. Price is called differently university: tuition landlord: rent banks: interest transportation: fares highway: toll doctor ,lawyer: fee employee: wage motels: room rate

Strategic Planning for Price Pricing objectives Target Market Price Promotion Place Product Geographic terms Discounts and allowances Price levels flexibility

Pricing Objectives Profit Pricing Sales Objectives Oriented Status Quo Dollar or Unit Sales Growth Growth in Market Share Target Return Maximize Profits Meeting Competition Nonprice Pricing Objectives Sales Oriented Profit Status Quo

Profit-oriented objectives Target return sets a specific level of profit as an objective. Profit maximization: to get as much profit as possible.

Sales-oriented objectives Sales-oriented objective: to get some level of unit sales, dollar sales, or share of market, without referring to profit. Sales growth – for companies pioneering innovative products or technologies to develop markets. Growth in market share – to enjoy better economies of scale (more profits, lower costs).

Status quo objectives Status quo: “Don’t rock the pricing boat.” To stabilize prices, or meet competition, or even avoid competition. Nonprice competition: aggressive action on one or more of the Ps other than price.

Price Flexibility Policies One-price policy – used in mass selling The same price to all customers who purchase products under essentially the same conditions and quantities Flexible pricing (e.g., in channels, business markets, expensive consumer shopping products) – used in personal selling Offering the same product and quantities to different customers at different prices.

Price level policies (p540-545) Influencing factors Skimming price policy Penetration pricing policy Introductory price dealing: temporary price cuts to speed new products into a market. Basic list prices: are the prices final customers or users are normally asked to pay for products. Value pricing – setting a fair price level for a marketing mix that really gives the target market superior customer value. ( p553)

Factors influencing price levels Demand Costs Competition

Skimming Pricing Price Quantity Initial skimming price Second Final Skimming Pricing Sell at high price before reducing to next price level and repeat “Skim the cream” pricing involves selling at a high price to those who are willing to pay before aiming at more price-sensitive consumers when demand is quite inelastic.

Penetration Pricing Penetration Pricing Penetration pricing involves selling the whole market at one low price when the demand curve is fairly elastic. Whole market price

Price level over PLC Introduction – skimming or penetrating Growth – lower the price Maturity – meeting competition, i.e. pricing at the market. Decline – lower the price further

Discount (p546) Discount: are reductions from list price given by a seller to buyers, who either give up some marketing function or provide the function themselves. Quantity discounts - to buy larger quantities. Cumulative quantity discounts Noncumulative quantity discounts Seasonal discounts – to buy earlier. Payment terms and cash discounts Trade discounts - to channel members. Sale price – temporary price cuts.

Payment terms and cash discounts (p547) Cash discounts – to pay quickly Net: payment for the face value of the invoice is due immediately. 2/10,net 30: the buyer can take a 2% discount off the face value of the invoice if the invoice is paid within 10 days. The full face value is due within 30 days.

Allowance and rebates (p549-550) Allowances: like discounts are given to final consumers, customers, or channel members for doing doing something or accepting less of something. Advertising allowances – to channel members for promotion. Stocking allowances – to intermediaries for shelf space. Push money(or prize money) allowances – to retailers to pass on to the salesclerks for selling certain items. Trade-in allowances (given the used products when similar new products are bought) – for used products. Rebates – refunds to consumers after a pruchase.

Geographic Pricing Policies Common Geographic Pricing Policies F.O.B. Uniform Delivered Freight Absorption Zone

Geographic pricing policies ( p550) FOB: free on board Zone pricing: making an average freight charge to all buyers within specific geographic areas. Uniform delivered pricing: making an average freight charge to all buyers. Freight absorption pricing: absorbing the freight cost so that a firm’s delivered price meets the nearest competitor’s.

Legal issues affecting pricing policies (p552) Price fixing is illegal Price discrimination Predatory pricing Resale price maintenance The End