2. How Important is Pricing?  It is an element of the Marketing Mix  Satisfactory pricing means…  Consumer views the purchase as a value and the business makes a profit SWBAT-ID 3 Pricing strategies and apply them to the Entertainment Industry

3. Pricing Strategies  Premium pricing  High price, high quality  Ex: The Ritz Hotel  Penetration pricing  Offers low price on an item to gain market share-then increases price  Ex: Introductory menu items  Price skimming  Prices are high - usually during introduction  Ex: new entertainment releases  Ultimately prices will reduce SWBAT-ID 3 Pricing strategies and apply them to the Entertainment Industry

4. Your task:  Find products related to the entertainment industry that are strategically priced at a premium level, penetration level and skimming level.  For each product explain using a minimum of 3-4 sentences, why you believe it is the strategy you labeled. SWBAT-ID 3 Pricing strategies and apply them to the Entertainment Industry

5.  Psychological pricing  Gets customers to respond on an emotional basis, rather than rational.  Ex: $.99 not $1.00 price point perspective  Seasonal Pricing variations  ‘Off-peak’ pricing, early booking discounts etc  Promotion pricing  Special pricing for a limited amt of time (BOGO) Ex: Payless  Captive Pricing  Companies will charge a premium price on the products compliments.  Ex: a razor manufacturer will charge a low price for the first plastic razor and recoup its margin (and more) from the sale of the blades that fit the razor SWBAT-ID 4 add’l pricing strategies and apply them to the entertainment industry

6. Your task:  Find products related to the entertainment industry that are strategically priced using the following strategies: psychological, seasonal variations, promotional and captive level.  For each product explain using a minimum of 3-4 sentences, why you believe it is the strategy you labeled.