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Transcript
PRICING DECISIONS Marketing Management Session 9 November 7, 1997 SESSION OUTLINE • The price: what it means to buyers and seller • Price in the marketing mix • Pricing decisions: – choosing the pricing method – choosing the pricing strategy – setting the price • Video: Leader of the pack • Case presentations: Fottle, part II PRICE • • • • • Most visible aspect of the marketing mix Generates revenues and therefore profits Generally controled by the seller Highly regulated Communication tool for – buyers – competitors – shareholders PRICE IN THE MIX • • • • • Consistent with positioning Sufficiently high to cover costs Sufficiently low to generate demand Competitive Many interactions with other areas (finance, accounting, production, …) PRICING METHODS • Cost-based • Demand based • Competitive pricing – Advantages? – Disadvantages? PRICING STRATEGY • Skimming pricing: – high introduction price – quick recovery of investment • Penetration pricing: – low introduction price – achieve large market share SETTING PRICE • Price itself • Price to resellers • Flexible pricing policies – quantity discounts – co-op allowances – price discrimination over time NEXT WEEK • • • • • Communication mix Read chapter 14 Definition of promotional tools The communication process Push and pull strategies