In this chapter you will: Understand how pricing objectives should guide strategic planning for pricing decisions; understand choices the marketing manager must make about price flexibility and price levels over the product life cycle; understand the many possible variations of a price structure, including discounts, allowances, and who pays transportation costs;...
Trang 1
Pricing Objectives
and Policies
Trang 2Strategic Planning for Price
Pricing objectives
Target Market
Price
Promotion Place
Product
Geographic terms—
who pays transportation and how
Discounts and allowances—
to whom and when
Price levels over product life cycle
Price flexibility
Exhibit 171
Trang 3Pricing Objectives
Dollar or Unit Sales Growth
Growth in Market Share
Target Return
Maximize Profits
Meeting Competition
Nonprice Competition
Pricing
Objectives Oriented Sales
Profit Oriented
Status Quo Oriented
Exhibit 174
Trang 4Price Flexibility Policies
The same price to all customers who purchase products under essentially the same conditions and quantities
Exchange rate changes may make this difficult in international markets
markets, expensive consumer shopping products)
Issues:
Use is increasing because of impact of information technology, customer databases, scanners, etc.
Selling costs may be higher if prices are negotiated
“Signals” to competitors
Customer dissatisfaction may be a problem
“Gray channels” and crossshipping
Trang 5Price Level Policies
“Skim the cream”
pricing involves selling at a high price to those who are willing to pay before aiming at more pricesensitive
consumers.
Price
Quantity
Initial
skimming
price
Second
price
Final
price
Skimming Pricing
Sell at high price before reducing to next price level and repeat
Trang 6Quantity
Penetration Pricing
Whole market price
Penetration pricing involves selling the whole market at one low price.
Price Level Policies
Trang 7Discount Pricing
Discount Pricing
Trang 8Common Kinds
of Allowances
Advertising Allowance
Push Money Allowance
Trade-In Allowance Stocking Allowance
Trang 9Geographic Pricing Policies
Common
Geographic
Pricing Policies
F.O.B.
Uniform Delivered
Freight Absorption
Zone
Trang 10Value Pricing
Fits with Strategy
Planning
Fits with Strategy
Planning
Target Market and Competition
Target Market and Competition
Focus on Customer Requirements
Focus on Customer Requirements
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