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Pricing Man

  1. COST CONSTRAINTS
    1. TYPES OF COSTS
    • TOTAL COST - TC
    • FIXED COST - FC
    • VARIABLE COST - VC
    • MARGINAL COST - MC
  2. COST CONSTRAINTS
    2. Cost - Volume Relationship
    Economies of Scale

    Learning effect / Curve
  3. COST CONSTRAINTS
    3. Competitors Cost & Prices
    Always compare to competitors
  4. PRICE OBJECTIVES
    • Profit Orientated
    • Sales Volume
    • Other
  5. PRICE OBJECTIVES
    Profit-orientated
    • Maximum Profit
    • Satisfactory Profit
    • Target profit (ROI)
    • Profit on each product item
  6. PRICE OBJECTIVES
    Sales Volume
    Maintain or Increase Market Share

    Maintain of Increase Sales Volume
  7. PRICE OBJECTIVES
    Other
    • 1. To stabalise prices in industry
    • 2. Avoid price competition
    • 3. Prevent competitve action
    • 4. Survive
    • 5. Serve a social purpose
  8. COST-BASED PRICING
    • Cost-plus pricing
    • Cost-plus-percentage of cost pricing
    • Cost-plus fixed-fee pricing
    • Experience Curve
    • Breakeven anaylsis
  9. PROFIT-BASED PRICING
    Target Profits

    Target Return on Sales

    ROI
  10. DEMAND-BASED PRICING
    Value Based

    Demand-backward

    Prestige

    Odd-even

    Price Lining

    Traditional

    Bundle
  11. NEW-PRODUCT PRICING
    Higher than Competitors = Skimming

    Lower than Competitors = Penetration

    Mid Range
  12. Competition-Orientated Methods
    Customary Pricing

    Loss-Leader

    Sealed Bid
  13. TACTICAL PRICING DESICIONS
    DISCOUNTS
    • Trade or Functional Discounts
    • Quantity Discounts
    • Cash Discounts
    • Seasonal Discounts
  14. DISCOUNTS
    Trade/Funcitional
    Factors in determining size
    • Existing Trade Discounts
    • Expectation of intermediaries
    • Relation of trade discount to services rendered
    • Operating cost of midman
    • Costs of marketing to midman
    • TD's by competitors to midman
    • Intensity of distribution
    • Turnover of midmans
    • Negotiating abilites of midman
  15. DISCOUNTS
    Quantity discount kinds
    • Noncumulative
    • Cumulative
    • Minimum order
  16. GEOGRAPHICAL PRICING
    Free-on-Rail

    Freight-Absorbtion

    Uniform Regional Pricing

    Base-Point pricing (Adv&Disadv)
  17. Managing Price Changes
    Initiating Price Cuts

    Inititaing Price Increase

    Buyers reactions to price changes

    Competitors reaction to price changes

    Responding to competitors price changes
  18. Responding to Competitor Price Changes
    Questions to ask
    • Why price change?
    • 2 gain market share or use up excess capacity?
    • 2 meet changing cost conditions or create price change in whole industry?
    • Is it permanent or temp?
    • Are other organisations responding?
  19. Responding to Competitor Price Changes
    Response
    • Reduce Price to match
    • Decide market price is to sensitive
    • Realise the difficulty in recapturing lost market share
    • Maintain price - raise perceived quality
    • Increase Price and Quality
    • Low price launch of fighting brand
  20. SEGMENTED PRICING
    Customer Segmented Pricing

    Product Form Pricing

    Location Pricing

    Time Pricing
  21. OTHER PRICING
    • Psychological Pricing
    • - perceived quality
    • - Reference
    • - Odd-even

    International Pricing

    Internet Pricing (adv)

    Promotional Pricing

    Value Pricing
  22. Internet Pricing adv
    Facilitate buyers acquisition of quality info for various goods

    Enables suppliers to update prices in response to observed demand

    Allows meaning market of potential buyers with price being outcom eof an auction process

    Permits prospective buyer to specify detail
Author
Calime
ID
19200
Card Set
Pricing Man
Description
MNM3036
Updated

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