* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Download Business in Global Markets
Marketing mix modeling wikipedia , lookup
Grey market wikipedia , lookup
Advertising campaign wikipedia , lookup
Bayesian inference in marketing wikipedia , lookup
Global marketing wikipedia , lookup
Market penetration wikipedia , lookup
Yield management wikipedia , lookup
Marketing strategy wikipedia , lookup
Gasoline and diesel usage and pricing wikipedia , lookup
Revenue management wikipedia , lookup
Dumping (pricing policy) wikipedia , lookup
Marketing channel wikipedia , lookup
Congestion pricing wikipedia , lookup
Perfect competition wikipedia , lookup
Transfer pricing wikipedia , lookup
Price discrimination wikipedia , lookup
Service parts pricing wikipedia , lookup
Ass. Prof. Dr. Özgür KÖKALAN İstanbul Sabahattin Zaim University Chapter Objectives Define price and list the elements affecting pricing strategy 2. Describe the types of pricing 1. 5-2 PRICE IN THE MARKETING MIX Price: exchange value of a good or service © PhotoDisc Developing Pricing Strategies Seven Factors Affecting Pricing Decisions Marketing Objectives Government Regulations Consumer Perceptions Manufacturing and Selling Costs Competition Consumer Demand Wholesalers and retailers needs Figure 14.11 Alternative Pricing Objectives Profitability Objectives Perhaps the most commonly used objective in firms’ pricing strategies Some firms try to maximize profits by reducing costs rather than through price changes © PhotoDisc Volume Objectives Bases pricing decisions on market share Market share: the percentage of a market controlled by a certain company or product © PhotoDisc Pricing to Meet Competition Third set of pricing objectives Seeks to meet competitors’ prices © PhotoDisc Prestige Objectives Prestige pricing encompasses the effect of price on prestige Prestige pricing establishes a relatively high price to develop and maintain an image of quality and exclusiveness Interesting WWW Site HOW PRICES ARE DETERMINED Determined in two basic ways: By applying the theoretical concepts of supply and demand By completing cost analyses © PhotoDisc Price Determination in Practice Cost-based pricing formulas: formulas calculate base-cost figures per unit and then add markups to cover overhead costs and generate profits Simpler and easier to use than economic theory-based pricing © PhotoDisc Breakeven Analysis Breakeven analysis: pricing technique that determines the sales volume that a firm must achieve at a specified price in order to generate enough revenue to cover its total cost Finding the Breakeven Point Breakeven point Total Fixed Cost = Contribution to Fixed Costs Per Unit (in units) Breakeven point (in dollars) = Total Fixed Cost 1 – Variable Cost Per Unit/Price Alternative Pricing Strategies • Skimming • Skimming pricing strategy: sets a high price relative to the prices of competing products Often works for introduction of a distinctive good or service with little or no real competition © PhotoDisc Alternative Pricing Strategies • Skimming Penetration • Penetration pricing strategy: sets a low price as a major marketing weapon Assumes that a belowmarket price will attract buyers and move a brand from an unknown newcomer to at least a brand recognition or even a brand preference stage © PhotoDisc Alternative Pricing Strategies Skimming Penetration Competitive • • Competitive pricing strategy: product priced at the general level of competing offerings Attempts to reduce the emphasis on price and concentrates marketing efforts on product, distribution, and promotion © PhotoDisc CONSUMER PERCEPTIONS OF PRICES Psychological Pricing Odd pricing (charging $39.95 or $19.98 instead of $40 or 20) Commonly-used retail practice, as many retailers believe that consumer favor uneven amounts © PhotoDisc