1 Part Five: Pricing Strategy ( Chapter10-Charpter11) Part Five: Pricing Strategy (...
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Transcript of 1 Part Five: Pricing Strategy ( Chapter10-Charpter11) Part Five: Pricing Strategy (...
1
Part Five: Pricing Strategy
( Chapter10-Charpter11)
Part Five: Pricing Strategy
( Chapter10-Charpter11)
2
• Price :The amount of money charged for a product or service,or the sum of the values that consumers exchange for the benefits of having or using the product or service.
• Dynamic pricing: Charging different prices depending on individual customers and situations.
Price Defined (P.307)
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Factors affecting price decisions (P.309)
• Internal factors
Marketing objectives;Marketing mix strategy;Costs;Organizational considerations
Internal factors
Marketing objectives;Marketing mix strategy;Costs;Organizational considerations
External factorsNature of the market and demand; Competitors; Other environment factors(economy, reseller, government)
External factorsNature of the market and demand; Competitors; Other environment factors(economy, reseller, government)
Pricing decision
Pricing decision
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• Type of Cost : ( P.313)
Fixed costFixed cost Variable
cost
Variable cost
Total cost
Total cost
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• Pricing in different types of markets
Pure competitionPure competition
Oligopolisticcompetition
Oligopolisticcompetition
Monopolisticcompetition
Monopolisticcompetition
Pure monopolyPure monopoly
PricingPricing
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• Demand curve (P.354)
• • P1 P1
• Q2 Q1 Q2 Q1
• A. Inelastic demand B. Elastic demand
pric
e P2 P2
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• Price elasticity of demand (P.382)
%Change in Quantity Demanded
Price Elasticity =
of demand %Change in price
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General pricing approaches (P.320)
ProductCosts
ProductCosts
Consumerperceptions
of value
Consumerperceptions
of value
Competitors’ prices and otherInternal and external factors
Competitors’ prices and otherInternal and external factors
Price floorNo profits below
this price
Price ceilingNo demand above
this price
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Cost -Based Pricing(成本导向定价)
• Cost - plus pricing (成本加成定价) (P.320)
e.g:
Variable cost $10
Fixed cost $300,000
Expected unit sales 50,000
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Fixed CostsUnit cost = Variable Cost + Unit Sales 300000 = $10 + = $16 50000
Unit Cost $16Markup Price = = =$20
(1-- Desired return on sales) 1--0.2
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Breakeven Volume Pricing (target profit pricing)(目标利润定价) (P.321)
• $ • 1200 Total Revenue
• 1000 Target Profit($20000)
• 800 Total Cost
• 600
• 400• 200 Fixed Cost
• 0
• 10000 20000 30000 40000 50000 Q
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Breakeven volume and profits at different prices
• (1)
price
(2)Unit
demand
needed
(3)
Expected unit
demand
(4)
Total
Revenue
(1)*(3)
(5)
Total
cost
(6)
Profit
(4)-(5)
$14
16
18
20
22
75000
50000
37500
30000
25000
71000
67000
60000
42000
23000
$994000
1072000
1080000
840000
506000
1100000
970000
900000
720000
530000
-$32000
102000
180000
120000
-24000
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• Value- Based Pricing (认知价值定价) (322)
Cost based pricing
Value-based pricing
Product Product Cost Cost Price Price valuevalue
Customer Customer Value Value Price Price Cost Cost
Customer Customer
Product Product
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Competition -Based Pricing(竞争导向定价)
• BID PROFIT ASSUMED EXPECTED
• PROFIT • $9,500 $ 100 81% $81• 10000 600 36% 216• 10500 1100 9% 99• 11000 1600 1% 16
•
Going-ratepricing
Going-ratepricing
Sealed-bidpricing
Sealed-bidpricing
随行就市定价 密封投标定价
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New-product Pricing Strategies (P.333)
Market-SkimmingPricing
Market-SkimmingPricing
Market-PenetrationPricing
Market-PenetrationPricing
1 、 High quality and image , enough buyer ;2 、 Cost is not high forsmaller volume ;3 、 Competitors hardlyenter the market 。
1 、 High quality and image , enough buyer ;2 、 Cost is not high forsmaller volume ;3 、 Competitors hardlyenter the market 。
1 、 Market is high price sensitive ;2 、 Cost is falling as sales volume increase ;3 、 Low price can keep out the competition 。
1 、 Market is high price sensitive ;2 、 Cost is falling as sales volume increase ;3 、 Low price can keep out the competition 。
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Product-Mix Pricing Strategies
STRATEGY DESCRIPTIONProduct line pricing Setting price steps between product (系列定价) line items 。Optional-product pricing Pricing optional or accessory products (附件定价) sold with the main product 。Captive-product pricing Pricing products that must be used (诱饵定价) with the main product 。By-product pricing Pricing low-value by-products to get (副产品定价) rid of them 。Product-bundle pricing Pricing bundles of products sold (捆绑定价) together 。
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Price-Adjustment Strategies
STRATEGY DESCRIPTION
Discount and allowancepricing
Segmented pricing
Psychological pricingPromotional pricing
Value pricing
Geographical pricing
Reducing prices to reward customerresponses such as paying early orpromoting the product 。Adjust prices to allow for differences in customer , products , or locations 。Adjust price for psychological effect 。Temporarily reducing prices to increase short-run sales 。Adjust prices to offer the right combination at a fair price 。Adjust prices to account for location 。
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Price Changes
• Initiating Price Cuts;
• Initiating Price Increases;
• Buyer Reactions to Price Changes;
• Competitor Reactions to Price Changes.
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Assessing and responding to competition’s price
changes ( P.347)
Has competitorcut price?
Has competitorcut price?
Will low price negatively affect out
market share & profit?
Will low price negatively affect out
market share & profit?
Can/should effectiveaction be taken?
Can/should effectiveaction be taken?
Hold current price;Continue to monitorCompetitor’s price
Hold current price;Continue to monitorCompetitor’s price
Reduce price Reduce price
Raise perceivedquality
Raise perceivedquality
Improve quality& increase price
Improve quality& increase price
Launch low-price“fighting brand”
Launch low-price“fighting brand”
No
No
No
Yes
Yes
Yes