1. Pricing
The final element

2. Price
Represents the value of a good or service for both the seller and the buyer
It describes all forms of purchase, both monetary and non-monetary

3. Price-planning
Systematic decision-making by an organization regarding all aspects of buying

4. Importance Part of the exchange Deregulation
Forms are more cost-conscious
Global economy= greater interest in currency valuations and exchange rates
In slow economies it is hard to raise prices

5. Relationship to other marketing elements
Prices vary over product life cycle
Affects customer service
Competitive with other firms, yet profitable
Sales force may need flexibility
As costs change, prices or other features may need to change

6. Approaches
Price-based
Non-price based

7. Factors affecting price
Demand
Costs
Government regulations (FTC)
Price fixing
Price discrimination
Unfair sales acts
Unit pricing
Price advertising
Channel members
Competition

8. Developing and applying a pricing strategy

9. Pricing objectives
Sales-based
Profit-based

10. Broad price policy
Sets the overall direction and tone for a firm’s pricing efforts and makes sure pricing decisions are coordinated with the firm’s choices as to a target market, an image, and other marketing mix factors

11. Methods of setting prices
Cost-based pricing
Demand based pricing
Competition based pricing

12. Cost-based pricing Cost-plus pricing
Cost of the item + desired profit= price

13. Demand-based pricing
A firm sets prices after studying consumer desires and prices acceptable to the target market
Demand-minus pricing
Chain markup pricing
Price discrimination

14. Competition-based pricing
Using competitors’ pricing rather than demand or cost considerations as primary pricing guideposts
Price above
Price below
Meet competition
Price leadership

15. Considerations in implementing a price strategy
Customary vs. variable pricing
One price vs. flexible pricing
Odd pricing
Price-quality association
Leader pricing
Multiple unit pricing
Price lining
Price bundling
Geographic pricing
Purchase terms
Price adjustments

16. Customary vs. variable pricing
Customary pricing a firm sets prices and seeks to maintain them for an extended period of time
Variable pricing- lets a firm intentionally lower or raise prices in response to cost fluctuations or differences in consumer demand

17. One price policy vs. flexible pricing
One-price policy - lets a firm charge the same price to all customers seeking to purchase a good or service under similar conditions
Flexible pricing – a firm sets prices based on the consumer’s ability to negotiate or the buying power of a large customer

18. Odd pricing
Set prices below even dollar amounts

19. Price-quality association
Consumer may believe high prices represent high quality and low prices represent low quality
Prestige pricing

20. Leader pricing
Price select items low to attract customers

21. Multiple-unit pricing
A firm offers discount to customers to encourage them to buy in quantity, as to encourage overall sales volume

22. Price lining
Involves selling products within a range of prices, with each representing a distinct level of quality or features
Benefits
Constraints

23. Price bundling
Sell a basic product, options, and customer service for one total price

24. Geographic pricing FOB mill or factory FOB destination
Uniform delivered
Zone pricing
Base-point pricing

25. Purchase terms
Discounts
Payment timing

26. Price adjustments List prices Escalator clauses Surcharges
Additional markups
Markdowns
Rebates