Lectures "Marketing management - Chapter 14: Developing pricing strategies and programs" provides students with the knowledge: Understanding pricing, setting the price, price adaptation strategies, initiating and responding to price changes. Invite you to refer to the disclosures.
Trang 1CHAPTER 14 DEVELOPING PRICING
STRATEGIES AND PROGRAMS
Nguyen Tien Dung, MBA Email: dung.nguyentien3@hust.edu.vn
Trang 25. How should a company respond to a
competitor’s price change?
Trang 41 Understanding Pricing
● Names of Price
● A Changing Pricing Environment
● How Companies Price
● Consumer Psychology and Pricing
Trang 5Synonyms for Price
Trang 6Common Pricing Mistakes
● Determine costs and take traditional industry
● Failure to vary price by product item, market
segment, distribution channels, and purchase
occasion
Trang 7Consumer Psychology and Pricing
Trang 8© Nguyễn Tiến Dũng 8
Trang 9Table 14.2 Consumer Perceptions vs Reality for Cars
Trang 10Price Cues
● “Left to right” pricing ($299 vs $300)
● Odd number discount perceptions
● Even number value perceptions
● Ending prices with 0 or 5
● “Sale” written next to price
Trang 11When to Use Price Cues
● Customers purchase item infrequently
● Customers are new
● Product designs vary over time
● Prices vary seasonally
● Quality or sizes vary across stores
Trang 122 Setting the Price: Steps
● Select the price objective
● Determine demand
● Estimate costs
● Analyze competitor price mix
● Select pricing method
● Select final price
Trang 13Step 1: Selecting the Pricing Objective
● Survival
● Maximum current profit
● Maximum market share
● Maximum market skimming
● Product-quality leadership
Trang 14Step 2: Determining Demand
● Price sensitivity
● Estimate demand curves
● Price elasticity of demand
Trang 15Table 14.3 Factors Leading to Less Price Sensitivity
● The product is more distinctive
● Buyers are less aware of substitutes
● Buyers cannot easily compare the quality of substitutes
● The expenditure is a smaller part of buyer’s total income
● The expenditure is small compared to the total cost of the end product
● Part of the cost is paid by another party
● The product is used with previously purchased assets
● The product is assumed to have high quality and prestige
● Buyers cannot store the product
Trang 16Step 3: Estimating Costs
Trang 17Cost Terms and Production
Trang 18Experience Curve
Trang 19Step 5: Selecting a Pricing Method
Trang 20Mark-up Pricing
Trang 21Target-Return Pricing
Trang 22Break-even Analysis
Trang 23Value-Based Pricing
Trang 24© Nguyễn Tiến Dũng 24
Trang 26Step 6: Selecting the Final Price
● Impact of other marketing activities
● Company pricing policies
● Gain-and-risk sharing pricing
● Impact of price on other parties
Trang 29© Nguyễn Tiến Dũng 29
Trang 30Promotional Pricing Tactics
● Loss-leader pricing
● Special-event pricing
● Cash rebates
● Low-interest financing
● Longer payment terms
● Warranties and service contracts
● Psychological discounting
Trang 33Brand Leader Responses to Competitive Price Cuts
● Maintain price
● Maintain price and add value
● Reduce price
● Increase price and improve quality
● Launch a low-price fighter line
Trang 344 Initiating and Responding to Price Changes
● Initiating Price Cuts
● Initiating Price Increases
● Responding to Competitors’ Price Changes