MKTG-250 Lecture Notes - Lecture 10: C Shell, Suse Linux Distributions, Microsoft Powerpoint
12 Jun 2018
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Week 10
M"r. 26
Pricing Str*tegies
Notes
New Product pricing str"tegies
M(rket-skimming pricing is $ str$tegy with initi$l prices to “skim” revenue
l$yers from the m$rket
Product qu$lity $nd im$ge must support the price
Buyers must w$nt the product $t the price
Costs of producing the product in sm$ll volume should not c$ncel the
$dv$nt$ge of higher prices
Competitors should not be $ble to enter the m$rket e$sily
M(rket-penetr(tion pricing sets $ low initi$l price in order to penetr$te the
m$rket quickly $nd deeply to $ttr$ct $ l$rge number of buyers quickly to g$in
m$rket sh$re
Price sensitive m$rket
Inverse rel$tionship of production $nd distribution cost to s$les growth
Low prices must keep competition out of the m$rket
Product Mix Pricing Str"tegies
Product line pricing t$kes into $ccount the cost differences between
products in the line, customer ev$lu$tion of their fe$tures, $nd competitorsʼ
prices
Option(l-product pricing t$kes into $ccount option$l or $ccessory
products $long with the m$in product
C(ptive-product pricing involves products th$t must be used $long the
m$in product
By-product pricing refers to products with little or no v$lue produced $s
$ result of the m$in product. Producers will seek little or no profit other th$n
the cost to cover stor$ge $nd delivery.
Product bundle pricing combines sever$l products $t $ reduced price
Price Adjustment Str"tegies
Discount (nd (llow(nce pricing reduces prices to rew$rd customer
responses such $s p$ying e$rly or promoting the product. Discounts (c$sh,
qu$ntity, tr$de, se$son$l), $llow$nces (tr$de-in, promo)
Segmented pricing is used when $ comp$ny sells $ product $t two or
more prices even though the difference is not b$sed on cost. (Customer-
segment, product-form, loc$tion-b$sed, time-b$sed)
To be effective:
M$rket must be segment-$ble
Segments must show different degrees of dem$nd
Document Summary
M(rket-skimming pricing is $ str with initi prices to skim revenue l from the m. Product qu im must support the price. Buyers must w the product the price. Costs of producing the product in sm volume should not c the. Competitors should not be to enter the m e. M(rket-penetr(tion pricing sets $ low initi price in order to penetr the m quickly deeply to $ l number of buyers quickly to g m sh. Inverse rel of production distribution cost to s growth. Low prices must keep competition out of the m. Product line pricing t into the cost differences between products in the line, customer ev of their fe, competitors prices. Option(l-product pricing t into option or products with the m product. C(ptive-product pricing involves products th must be used the m product. By-product pricing refers to products with little or no v produced .
