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Measuring Current and FutureDemand
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Est imat ing Current Market
Demand
Total Market PotentialArea Market Potential
Industry Sales and Market Share
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Est imat ing Future Market
Demand
Survey of Buyers Intentions : In various time frame
Sales Force Opinions: Sales executives
Expert Opinion: Dealers, Suppliers, Experts, Trade
Association etc.
Past Sales Analysis : Trend, Past SalesMarket Test Method : New
Product, Idea
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Price
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Price
The amount of money charged for a
product or service or the sum of the
values that consumer exchanges for the
benefits of having the product.
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Pricing Objectives
Survival: Short term
Maximize Current Profit: Price and demandequilibrium
Maximize Market Share : Long term
Maximum Market Skimming : New product
Product Quality Leadership : High price for high
performance
Cost Recovery : Non profit, Public organization
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Factors Affecting Pricing Decisions
( Internal factors)
Marketing Objectives : Target market, Positioning
Marketing Mix Strategy : Category, Design,Distribution,
Promotion
Cost: Fixed cost, Variable cost.
Cost as a Function of Production Experience:
Learning curve Organizational Consideration : Opinion of
various
head of departments.
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Factors Affecting Pricing Decisions
( External factors)
Nature of the Market: Pure competition,
monopolistic, oligopoly, pure monopoly.
Consumers Perception About Price and
Value.
Competitors Price, Cost and Offers. Other External Factors:
Economic condition,
Interest rate,Government,Social concern
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Pricing Approaches
Cost based pricing
Cost plus pricing
Break even pricing
Value based pricing
Competition based pricing
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Pricing Strategies for New Product
Market Skimming Pricing
Market Penetration Pricing
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Product Mix Pricing strategy
Product Line Pricing: Price based on cost
differences. Optional Product Pricing: Price of optional
accessories or parts.
Captive Pricing Strategies: Exp. Blade for a razor,
film for a camera etc. By Product Pricing
Product Bundle Pricing: Bundle tickets, Family
suite in hotel
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Price Adjustment Strategies
Discount and Allowance Pricing: cash discount,
quantity discount, seasonal discount, allowance foran old
item.
Segmented Pricing : For seniors, children etc
Psychological Pricing: Special product
Promotional Pricing: Temporary pricing Geographical Pricing:
DAT,DAP etc
International Pricing : Based on country status
