1. Pricing Methods and Strategies
Subject: Managerial Economics MBA-Sem-I Unit-IV
Pricing Methods and Strategies

2. Pricing Objectives To maximise profits To increase pales
To increase the market share
To satisfy customers
To meet the competition
To generate internal resources to finance expansion and growth
To maximise the value of the firm for different stakeholders

3. There are four methods of pricing: Cost-based pricing
Pricing Methods
There are four methods of pricing:
Cost-based pricing
Competition based pricing
Demand-based pricing
Strategy-based pricing

4. 1.Cost based prcing\
It is of three types:
Cost-plus pricing: It is one where the profit margin (measured as a percentage of cost or selling price) is added to the total or full cost to arrive at the selling pricing
Marginal cost pricing: Selling price is fixed in such a way that it covers fully the variable or marginal cost and contributes towards the recovery of fixed costs fully or partly, depending upon the market situation.
Social cost –based pricing: Charging based on social cost is a system of charging extra for the users of a transport net work during peak hours to reduce traffic congestion.

5. 2.Competition-based Pricing
Here pricing is a very complex task.
Sealed bid pricing
Going-rate pricing
Limit pricing

6. 3.Demand-oriented pricing
a) Price discrimination
The objectives of price discrimination are:
Develop a new market including, for exports
Utilise the maximum capacity
Share consumer surplus along with the consumer and not leave it totally to him
Meet the competition
Increase the market share
b) Perceived value pricing
c) Priority pricing

7. 4.Strategy-based pricing
Market skimming
Market penetration
Two-part pricing
Block pricing
Commodity bundling
Peak load pricing
Cross subsidisation
Transfer pricing
Loss Leader Pricing
Predatory prcing
Psychological pricing
Flate rat pricing
Precedence Model
Transaction based pricing

8. Thank You