1. Pricing
Marketing 1

2. TREAT – Customer Service
Trust – provide what was promised
Responsiveness – willingness to help customers promptly
Empathy – degree of caring and individual attention you show to customers
Assurance – ability to convey trust and knowledge
Tangibles – physical facilities & equipment, employees appearance

3. What is Price? The value in money (or it’s equivalent)
placed on a good or service
Usually expressed in monetary terms
May also be expressed in non-monetary terms such as exchanging goods or services for a product or service
The Barter system is the oldest form of pricing

4. Price Establishes for the company
Firms Image
Competitive Edge
Profits

5. Price Goals Make a Profit – Number 1 Goal! Gaining Market Share
Compete/Meet with the Competition

6. Price Strategies
Psychological Pricing– pricing technique that helps create an illusion for customers. (Ex. Price ending in odd numbers $.99 or $.95)
Prestige Pricing– strategy to set higher than average pricing to suggest status and high quality.(Ex. Rolls Royce, Rolex watches, Waterford crystal)
Promotional Pricing – strategy used in conjunction with sales promotions where prices are reduced for a short period of time
Volume Pricing or EDLP (Everyday low prices) – a retailer is able to pay lower prices for its merchandise due to the volume pricing it receives from it suppliers.

7. Price Strategies
Psychological Pricing– pricing technique that helps create an illusion for customers. (Ex. Price ending in odd numbers $.99 or $.95)

8. Price Strategies
Prestige Pricing– strategy to set higher than average pricing to suggest status and high quality.(Ex. Rolls Royce, Rolex watches, Waterford crystal)

9. Price Strategies
Promotional Pricing – strategy used in conjunction with sales promotions where prices are reduced for a short period of time

10. Price Strategies
Volume Pricing or EDLP (Everyday low prices) – a retailer is able to pay lower prices for its merchandise due to the volume pricing it receives from it suppliers.

11. Price Vocabulary
Price Fixing– Occurs when competitors agree on certain price ranges within which they set their own prices.
Market Share- a company’s percentage of total sales volume generated by all competition in a given market.
Return on Investment (ROI) – a calculation used to determine the relative profitability of a product.

12. Price Vocabulary, continued
Break-Even Point– Point at which sales revenue equals the costs and expenses of making and distributing a product.
Bait and Switch – advertising strategy that consists of a low price on an item that they have no intention of selling.

13. 4 Factors that affect Price
Costs & Expenses
Supply and Demand
Consumer Perceptions
Competition

14. Customer Perception
Customer’s perceived value makes the difference in how much they will be willing to pay
Value is anticipated satisfaction of the customer
If consumer believes they will receive higher satisfaction they will be more willing to pay higher price

15. Key Factors In Determining Price
Internal Factors and External Factors help determine price!

16. Difference in Pricing Good and Service
Internal Factors
Cost of Goods
Operating Expenses
Product Quality, Trendiness
External Factors
Supply & Demand
Government Regulations
Competition
Natural Events (Disasters)
Economic Events (Recessions)

17. Difference in Pricing Good and Service
Pricing Goods
Manufacturing
Shipping
Packaging
Storage Costs
Pricing Services
Labor
Related Product Costs
Related Equipment Costs

18. Summary
Price is the value in money (or non-monetary exchange) for the exchange of a good or service
Customers’ perception of value of product determines their willingness to pay that exchange
Seller must be able to gauge customer perception and price to generate profit but meet customer expectation
Pricing is determined by internal and external factors
Goods and services have different considerations for pricing
Pricing is KEY to business success or failure