1. Pricing

2. iPad Mini $329+ Kindle Fire Nexus 7 Both $199

3. What is Price? What is given up for the product The only P that directly generates revenue Price can be an indicator – Value – Quality

4. Things to consider… Competition Costs Company objectives Customers Channel members

5. Company PRICE objectives Profit Oriented – Profit Maximization – Satisfactory Profits – Target ROI Sales Oriented – Market Share – Sales Maximization

6. Company PRICE Objectives Competitor Oriented – Parity – Status quo Customer Oriented – Value for a specific TM

7. How Customers influence price Demand

8. Supply

9. Price Equilibrium

10. However….. Supply and demand analysis – Don’t account for marketing – Or branding – Or differing curves Luxury goods, where higher price leads to higher demand

11. Still on Customers influence Elasticity of demand – Elastic – Inelastic What influences elasticity – Income/Purchasing power – Substitutes – Durability – Other uses – Cross-price elasticity Complimentary products

12. Costs Variable Fixed Total

13. Break Even Analysis The point at which your profit is neither negative or positive FC/CPU

14. Competition Monopoly  ONE firm – Cable, FPL Oligopoly  Handful of firms – Airlines Monopolistic Competition  many firms, differentiated products, different prices – Most common Pure Competition  many firms, commodities, same prices – Wheat

15. Other influences on Price Internet – Shopping bots – Auctions Stage in PLC Distribution Strategy – match of YOURS with the CHANNEL

16. Pricing Strategy Price Skimming Penetration Pricing Status Quo

17. Price Skimming

18. Penetration Pricing

19. Unfair Practices Price Fixing/Collusion Discrimination (only for products) Predatory Pricing – Charge low to kill competition

20. Other common Tactics Odd/Even pricing – $99.95 Price Bundling Two Part pricing – Air Ticket, baggage fee, meal and seat