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Pricing Strategies
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Price competition, value pricing
Non-price competition
Market entry pricing strategies, marketskimming and market penetration
Price discounts and allowances
Geographic pricing strategies Special pricing situations
Lesson Overview
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Price Determination Process
Select Pricing Objective
Select Method of Determining the Base Price
Cost-plusPricing
Price basedon Demandand Costs
Price Set inrelation toMarket alone
Design Appropriate Strategies
1.Price versus NonpriceCompetition
2.Skimming VsPenetration pricing
3.Discounts andAllowances
1.Geographicpricing
2.One price vs
Flexible price3.Leader Pricing
1.Everyday lowpricing
2.Resale priceMaintenance
3.Reactive vsProactive changes
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Price versus Non-Price Competition
PriceValue Pricing
Low Price
Non-
Price
Stable Price
Emphasize other partsof marketing mix
Ajanta wall cloaks, Telephones, Big Bazar, China Bazar4
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Non-Price Competition
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Market-Entry Strategies
Market-SkimmingPricing
Set a relatively high price
Market-Penetration
Pricing
Low initial price
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Discounts and Allowances
TradeDiscounts
Reductions based on buyer
performing marketing functions
QuantityDiscounts
Reductions based on
size of purchase
CashDiscounts
Deductions based on
paying within a specified time
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Parts of a Cash Discount
3/10, NET 30
1/7, NET 30
Number of daysfrom date of
invoice inwhich bill
must be paidto receive
cash discount
Percentage tobe deductedif bill is paid
withinspecified time
Number of daysfrom date ofinvoice after
which billis overdue
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Other Discounts and Allowances
Coupons
E-coupons
Rebates
PromotionalAllowances
SeasonalDiscounts
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Geographic Pricing Strategies
Point-of-
ProductionFOB
FACTORY
UniformDelivery
Same Price
Cost of Freight
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Geographic Pricing Strategies
Freight-Absorption
Zone-Delivered
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Pricing Strategies
Flexible-price
One-price
Pricelining
Oddprice
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Pricing Strategies
Leaderpricing Loss Leader
High-Low
pricing
Everyday low price
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Pricing Strategies
ResalePrice
Maintenance
Suggested retail price
Reactivechanges
ProactiveChanges
Price Wars
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Key Terms and Concepts
Strategy
Price competition
Value pricing
Nonprice competition Market-skimming pricing
Market-penetration pricing
Predatory pricing
Quantity discount
Noncumulative discount
Cumulative discount
Trade (functional) discount
Cash discount Rebate
Price customization
Seasonal discount
Promotional allowance
Price discrimination
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Key Terms and Concepts
Robinson-Patman Act
FOB factory (mill) pricing
Uniform delivered pricing
Zone-delivered pricing
Freight-absorption pricing
One-rice strategy
Flexible-price (variable-price)strategy
Flat-rate pricing
Single-price strategy
Price lining
Odd pricing
Leader pricing
Leaders
Loss leader
Unfair-practices (unfair-sales) acts
High-low pricing
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