Principles of marketing: Lecture 25 provide students with knowledge about: setting pricing policy; selecting the pricing objective; determining demand; estimating costs; analyzing competitors’ costs, prices, and offers; selecting a pricing method; selecting final price;... Please refer to this lesson for details!
MGT301 Principles of Marketing Lecture25 Summary of Lecture24 Factors Affecting Price Decisions Internal Factors Internal Factors Positioning Objectives Pricing Pricing Decisions Decisions External Factors External Factors Target Market Today’s Topics Setting Pricing Policy Selecting the pricing objective Determining demand Estimating costs Analyzing competitors’ costs, prices, and offers Selecting a pricing method Selecting final price Pricing Objectives Profit Oriented Sales Oriented Status Quo Pricing Pricing Objectives Objectives Profit Oriented Pricing Objectives Target Return Maximize Profits Pricing Pricing Objectives Objectives Profit Oriented Pricing Objectives Sales Oriented Target Return Maximize Profits Dollar or Unit Sales Growth Growth in Market Share Use Under These Conditions Product’s quality and image must support its higher price Costs can’t be so high that they cancel the advantage of charging more Competitors shouldn’t be able to enter market easily and undercut the high price Market Penetration Setting a Low Price for a New Product in Order to “Penetrate” the Market Quickly and Deeply Attract a Large Number of Buyers and Win a Larger Market Share I.e. Dell Use Under These Conditions Market must be highly pricesensitive so a low price produces more market growth Production/distribution costs must fall as sales volume increases Must keep out competition & maintain its low price position or benefits may only be temporary Product Mix Pricing Strategies Product Product Mix Mix Pricing Pricing Strategies Strategies Product Product Line Line Pricing Pricing Optional-Product Optional-Product Pricing Pricing Captive-Product Captive-Product Pricing Pricing By-Product By-Product Pricing Pricing Product-Bundle Product-Bundle Pricing Pricing Product Line Pricing Setting Price Steps Between Product Line Items i.e. Rs. 299, Rs. 399 OptionalProduct Pricing Pricing Optional or Accessory Products Sold With The Main Product i.e. Car Options CaptiveProduct Pricing Pricing Products That Must Be Used With The Main Product i.e. Razor Blades, Film, Software ByProduct Pricing Pricing lowvalue ByProducts to get rid of them ProductBundle Pricing Pricing bundles of products sold together i.e. Season tickets, Computer makers Enough for today. . Summary Setting Pricing Policy General Pricing Approaches New Product Pricing Strategies Market Skimming Market Penetration Product Mix Pricing Strategies Product Line Pricing Product Line Pricing OptionalProduct Pricing OptionalProduct Pricing Product Product Mix Mix Pricing Pricing Strategies Strategies CaptiveProduct Pricing CaptiveProduct Pricing ByProduct Pricing ByProduct Pricing ProductBundle Pricing ProductBundle Pricing Next… Pricing (cont ) MGT301 Principles of Marketing Lecture25 ... ByProduct Pricing ProductBundle Pricing ProductBundle Pricing Next… Pricing (cont ) MGT301 Principles? ?of? ?Marketing Lecture? ?25 ... Objectives Target Return Maximize Profits Pricing Pricing Objectives Objectives Profit Oriented Pricing Objectives Sales Oriented Target Return Maximize Profits Dollar or Unit Sales Growth Growth... Pricing Products That Must Be Used With The Main Product i.e. Razor Blades, Film, Software ByProduct Pricing Pricing lowvalue ByProducts to get rid? ?of? ?them ProductBundle Pricing Pricing bundles? ?of? ?products sold together i.e. Season tickets, Computer makers