1. How much will I charge for MILK?
Eagle Challenge
Pricing
Due Today
ROI WORKSHEET
HOW MUCH?
Pricing
How much will I charge for MILK?
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KOSSA Standard OE6: Compare various pricing strategies and explain the goals of pricing

2. Pricing Concepts
Why It's Important
After deciding on pricing goals, marketers must establish pricing strategies that are compatible with the rest of the marketing mix.
Another term for Marketing Mix?
KOSSA Standard OE6: Compare various pricing strategies and explain the goals of pricing

3. Basic Pricing Concepts
There are three basic pricing concepts that you will want to consider in determining the price for any given product:
cost-oriented pricing
demand-oriented pricing
competition-oriented pricing
KOSSA Standard OE6: Compare various pricing strategies and explain the goals of pricing

4. Pricing Concepts Cost-Oriented Pricing
In cost-oriented pricing, marketers first calculate the costs of acquiring or making a product and their expenses of doing business; then they add their projected profit margin to these figures to arrive at a price. Two common methods are:
markup pricing
cost-plus pricing
KOSSA Standard OE6: Compare various pricing strategies and explain the goals of pricing

5. Pricing Concepts Cost-Oriented Pricing
Markup pricing is used primarily by wholesalers and retailers who are involved in acquiring goods for resale. The markup must cover the business’s expenses.
Price = cost + markup (as percentage)
Cost-plus pricing is used by manufacturers and service companies.
Price = all costs + all expenses (fixed and variable) + desired profit
KOSSA Standard OE6: Compare various pricing strategies and explain the goals of pricing

6. Pricing Concepts Demand-Oriented Pricing
Marketers who use demand-oriented pricing attempt to determine what consumers are willing to pay for given goods and services. Demand-oriented pricing is effective when:
there are few substitutes for an item
there is demand inelasticity
KOSSA Standard OE6: Compare various pricing strategies and explain the goals of pricing

7. Pricing Concepts Competition-Oriented Pricing
Marketers who study their competitors to determine the prices of their products are using competition-oriented pricing. These marketers may elect to take one of three actions:
price above the competition
price below the competition
price in line with the competition (going-rate pricing)
Tender Pricing
KOSSA Standard OE6: Compare various pricing strategies and explain the goals of pricing

8. Pricing Concepts Pricing Policies
A basic pricing decision every business must make is to choose between a one-price policy and a flexible-price policy.
A one-price policy is one in which all customers are charged the same price for the goods and services offered for sale.
A flexible-price policy permits customers to bargain for merchandise.
KOSSA Standard OE6: Compare various pricing strategies and explain the goals of pricing

9. Worksheet
KOSSA Standard OE6: Compare various pricing strategies and explain the goals of pricing