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Pricing Concepts
Professor Close
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Introduction to Pricing (1)
Pricing strategy (nothing you buy is priced
too high)
Definition: value given up for benefits fir
offers (fu!!y: good deal varies" real estate)
Positive: easiest #p$ to change" deterines
revenues
%egative: difficult to evaluate" different to gainadvantage
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Introduction to Pricing (&)
Pricing 'trategy (cont)
eference price: consuers* ideas of +hat
price #should$ be (,hat for gallon gas- CD-
.ovie-)
/le0ibility
dinistered prices /irs decide on price vs 2t3 (fluctuation is relatively
uncoon)
Channel conflict (.'P)
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Introduction to Pricing (4)
Pricing 'trategy (cont) /le0ibility
5ne price: sae price to all under sae conditions
/le0ibility: price differs by custoer" negotiation
Proble: dissatisfaction" searching for deals (te0ts) 6asier no+ tech (fre73 'hopper)
#%ae your price$ (Price8ine)
()
'oe disli2e (autos)
Custoer satisfaction
#abit$ foring (;3'3 autos)
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Priceline Coercial
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Pricing 5barea sales
.easureent is easy
Proble: ust have soe profit (large sales
profits"6astern airlines" dotcos)
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Pricing 5b
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?aco @ell Coercial
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Pricing 5b
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Pricing 5b
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Pricing 5b
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Pricing 5bspiffs>p33 etailer incentives for aggressive selling (target: sales
force) Fuestion: incentives
?radein: price reduction for old ites
'easonal: buy unpopular ties (storage"
heating oil)
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Payent ?ers
%et: full aount
Cash Discount: reduction to pay early
&>1E= net 4E: &J discount if paid +>in 1E days" full payent due in 4E (@IK ta2e any+ay)
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'uary
5b