Scribd
Upload
103 views14 pages

MK 101-Pricing Strategies: Dr. Prafulla Agnihotri

The document discusses pricing strategies and objectives. It begins by outlining major problems in pricing strategies, such as setting an initial price and modifying prices over time. It then discusses selecting pricing objectives like profit maximization or market share leadership based on the marketing plan and brand positioning. Different pricing methods are presented, like cost-plus pricing or target profit pricing. Factors that influence price determination include demand, costs, and competition. The document concludes by summarizing the process for setting an initial price, which involves selecting objectives, estimating costs and demand, analyzing competitors, and choosing a final price.

Uploaded by

Aroop Sanyal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
103 views14 pages

MK 101-Pricing Strategies: Dr. Prafulla Agnihotri

The document discusses pricing strategies and objectives. It begins by outlining major problems in pricing strategies, such as setting an initial price and modifying prices over time. It then discusses selecting pricing objectives like profit maximization or market share leadership based on the marketing plan and brand positioning. Different pricing methods are presented, like cost-plus pricing or target profit pricing. Factors that influence price determination include demand, costs, and competition. The document concludes by summarizing the process for setting an initial price, which involves selecting objectives, estimating costs and demand, analyzing competitors, and choosing a final price.

Uploaded by

Aroop Sanyal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
You are on page 1/ 14

MK 101- Pricing Strategies

Dr. Prafulla Agnihotri


Professor,
Marketing Group

[email protected]

MK101-Pricing Objectives and 1


Strategies
Main Points
1. Major Problems in Pricing Strategies

2. Setting the Price for the First Time


3. Selecting Pricing Objectives
4. Selecting Pricing Method
5. Selecting Final Price

MK101-Pricing Objectives and 2


Strategies
Major Problems in Pricing Strategies

• How to set up price on a product for the


first time ?
• How to modify a product’s price to meet
changes in marketing environment ?
• How to initiate and respond to price
changes ?

MK101-Pricing Objectives and 3


Strategies
Selecting the Pricing Objectives
 Consider Marketing Plan
A) Target market selected; and

B) Desired positioning and brand image

 Pricing Objective
A) Survival
B) Current profit maximisation
C) Market share leadership
D) Product quality MK101-Pricing
leadership Objectives and 4
Strategies
Pricing Objectives can also be
regrouped as….
• Profit-oriented
– To achieve a target return
– To maximise profits
• Sales-oriented
– To increase sales volume
– To maintain or increase market share
• Status quo-oriented
– To meet competition
– To stabilise prices / Non-price competition
MK101-Pricing Objectives and 5
Strategies
Factors Influencing Price
Determination
• Estimated Demand
• Competitive Reactions
– Directly similar products
– Available substitutes
– Unrelated products seeking the same
customer outlay
• Other Marketing-mix Elements, and
• Cost of the Product
MK101-Pricing Objectives and 6
Strategies
Pricing Orientation and Pricing
Strategies

MK101-Pricing Objectives and 7


Strategies
Selecting a Pricing Method / Strategy

1. Cost plus pricing


2. Target profit pricing (Target ROI)
3. Perceived value pricing
4. Follow the leader / going rate pricing
5. Sealed bid pricing
6. Marginal costing
MK101-Pricing Objectives and 8
Strategies
The Price Determination Process
Select pricing objective

Select method to determine the base price:


Cost-plus Price based on Price set in
Pricing both demand relation to
and costs market alone

Design appropriate strategies


Price vs nonprice Geographic pricing High-low vs
competition One price vs flexible everyday low
Skimming vs penetration pricing price Reactive vs
Discounts and allowances Leader pricing proactive changes
MK101-Pricing Objectives and 9
Strategies
Selecting Final Price
• Psychological Pricing
• Company Policy
• Influence of other Marketing - Mix Elements
• Other Factors - Effects on :
1. Distributors and dealers
2. Company sales force
3. Competitors
4. Government interference
MK101-Pricing Objectives and 10
Strategies
Four Introductory Marketing Strategies

Promotion
High Low
Rapid- Slow-
High skimming skimming
strategy strategy
Price Sony
Rapid Slow
Low penetration penetration
strategy strategy
Nirma Babool, Vicco
Vajradanti
MK101-Pricing Objectives and 11
Strategies
Nine Price / Quality Strategies
Price
High Medium Low

1. Premium 2. High-value 3. Superb-value


Product Quality

High
strategy strategy strategy

Medium 4. Overcharging 5. Medium-value 6. Good-value


strategy strategy strategy

Low 7. Rip-off 8. False economy 9. Economy


strategy strategy strategy

MK101-Pricing Objectives and 12


Strategies
Setting the Price for the First Time

• Selecting the pricing objective


• Determining demand
• Estimating costs
• Analysing competitors’ prices and offers
• Selecting a pricing method; and
• Selecting the final price

MK101-Pricing Objectives and 13


Strategies
Thank You

MK101-Pricing Objectives and 14


Strategies

You might also like