Factors Affecting Pricing Decisions Customer Other internal and external perceptions considerations Product marketing strategy, objectives and mix Nature of the market and demand Price ceilin Competitors' strategies and prices Price floor No demand above No profits below this price this price O Copy rights reserved, Zou Deqiang
16 16 © Copy rights reserved, Zou Deqiang Factors Affecting Pricing Decisions
Experience Curve Pricing Strategies Unit cost Unit cost E Price Experience O Copy rights reserved, Zou Deqiang
17 17 © Copy rights reserved, Zou Deqiang Experience Curve Pricing Strategies
4 Analyze Competitor Price Mix Does the firm offer features not offered by the closest competitor? Given this point of comparison, should the price be higher, lower, or the same? > Why is the Whirlpool Duet combo priced nearly four times what some competitors charge for a comparable product? O Copy rights reserved, Zou Deqiang
18 18 © Copy rights reserved, Zou Deqiang 4 Analyze Competitor Price Mix • Does the firm offer features not offered by the closest competitor? • Given this point of comparison, should the price be higher, lower, or the same? ¾Why is the Whirlpool Duet combo priced nearly four times what some competitors charge for a comparable product?
5 Select a Pricing Method Markup pricing T arget-return pricing Perceived-value pricing Value pricing Going-rate pricing Auction-type pricing O Copy rights reserved, Zou Deqiang
19 19 © Copy rights reserved, Zou Deqiang 5 Select a Pricing Method • Markup pricing • Target-return pricing • Perceived-value pricing • Value pricing • Going-rate pricing • Auction-type pricing
Pricing Methods Markup Pricing Cost-Oriented Pricing Target Return Pricing Value-Oriented Perceived Value Pricing Pricing Value Pricing Competition-Oriented Going-Rate Pricing Sealed-Bid Pricing Pricing Auction
20 Cost –Oriented Pricing Value-Oriented Pricing Competition-Oriented Pricing Markup Pricing Target Return Pricing Perceived Value Pricing Value Pricing Going-Rate Pricing Sealed-Bid Pricing Auction Pricing Methods