...Home » marketing concepts » Pricing Pricing In the narrowest sense, price is the amount of money charged for a product or service. More broadly, price is the sum of all the values that consumers exchange for the benefits of having or using the product or service. PRICE – The amt 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. “One can define price as that which people have to forego in order to acquire a product or service.” What does a buyer think? To a buyer, price is the value placed on what is exchanged. Something of value – usually purchasing power – is exchanged for satisfaction or utility. Purchasing power depends on a buyer’s income, credit, and wealth. Buyers’ concern about price is related to their expectations about the satisfaction or utility associated with a product. Buyers must decide whether the utility gained in an exchange is worth the purchasing power sacrificed. Different terms can be used to describe price for different forms of exchange, (rent, premium, toll, retainer, fee, interest, etc.). Historically, price has been the major factor affecting buyer choice. This is still true in poorer nations, among poorer groups and with commodity products. However, non-price factors have become more important in buyer-choice behavior in recent decades. Price is also one of the most flexible elements of the marketing mix. Do you agree ? Unlike product features...
Words: 2260 - Pages: 10
...A++PAPER;http://www.homeworkproviders.com/shop/mkt-571-week-4-tapping-the-global-market/ MKT 571 WEEK 4 TAPPING THE GLOBAL MARKET MKT 571 Week 4 Tapping The Global Market PPT!! Determine Pricing Strategies Consumers often actively process price information, interpreting it from the context of prior purchasing experience, formal communications ( advertising, sales calls, and brochures), informal communications ( friends, colleagues, or family members). How consumers perceive prices and what they consider the current actual price to be (Kotler & Keller, 2012). Reference prices compare an observed price to an internal reference price they remember or an external frame of reference such as a posted regular retail price (Kotler & Keller, 2012). PRICE- QUALITY INFERENCES Many consumers use price as an indicator of quality. Higher- priced cars are perceived to possess high quality (Kotler & Keller, 2012). PRICE ENDINGS Many sellers believe prices should end in an odd number. Customers see an item priced at $ 299 as being in the $ 200 rather than the $ 300 range (Kotler & Keller, 2012). Selecting the pricing objective Survival - prices cover variable costs and some fixed costs, the company stays in business (Kotler & Keller, 2012). Maximum Current Profit - Many companies try to set a price that will maximize current profits (Kotler & Keller, 2012). Maximum Market Share – Higher sales volume will lead to lower unit costs and higher long- run profit...
Words: 500 - Pages: 2
...PRICING AND PRICING POLICIES PRICING Pricing is the process whereby a business sets the price at which it will sell its products or services. It is a method adopted by a firm to set its selling price. It usually depends on the firm's average costs, and on the customer's perceived value of the product in comparison to his or her perceived value of the competing products. Different pricing methods place varying degree of emphasis on selection, estimation, and evaluation of costs, comparative analysis, and market situation. See also pricing strategy. PRICING POLICIES Pricing policy refers how a company sets the prices of its products and services based on costs, value, demand, and competition Pricing Policies provide the framework and consistency needed by the firm to make reasonable, practicable, and effective pricing decisions. Although policies in any area of management are difficult to develop, firms with a well-established set of pricing policies usually make consistently better pricing decisions than firms without such policies. STEPS IN SETTING A PRICING POLICY 1.) Selecting the Pricing Objective – it is where the company wants to position its product a. Survival b. Maximum Current Profit - estimate the demand and costs associated with alternative prices and choose the price that produces maximum current profit, cash flow, or rate of return on investment. c. Maximize Market Share/ Market Penetration – low price d. Maximum Product Skimming...
Words: 2081 - Pages: 9
...Pricing as an Element of the Marketing Mix THE COMMERCIAL EXCHANGE Although people often think of marketing as synonymous with advertising or salesmanship, it is actually much broader. Marketing consists of the full range of activities involved in facilitating commercial exchanges and having all of these activities be guided by a concern for customer needs. The central idea here is that of the commercial exchange (see Figure 1.1). This is where a seller provides a product to a buyer in return for something in exchange (usually an amount of money). The product could be something tangible, which is referred to as a good, or the product could be the result of human or mechanical effort, which is referred to as a service. The buyer could be a consumer - an individual who purchases a product for his or her own use - or the buyer could be a business customer - an individual or group who purchases the product in order to resell it or for other business purposes. One aspect that makes the commercial exchange a very important idea is that it describes an interaction that is voluntary. Both the buyer and seller participate in the exchange voluntarily because the exchange will lead them both to be better off. For example, consider the vendor in the street selling Chocolates. You pay in your money and get a large package of M&M’s. You do that voluntarily because you would rather have the bag of candy than the money. On the other hand, the Mars company, which produces M&M’s...
Words: 5931 - Pages: 24
...cost-benefit analysis; budgeting and planning process. Unit-III Sources of development finance; institutional finance to entrepreneurs; working capital management; incentives and subsidies; policies governing entrepreneurship; role of a consultancy organization. Unit-IV A review of project performance; post evaluation approach; community participation in projects; SWOT analysis; managing risk and exposure. Suggested Readings: 1. 2. 3. 4. Note: 1. 2. Four case studies will be discussed in a paper by the concerned teacher in the class. Instructions for External Examiner: The question paper will have two sections. Section ‘A’ shall comprise eight questions (two questions from each unit). The candidates will be required to attempt four questions (selecting one question from each unit). Section ‘B’ will contain one CASE STUDY which will be compulsory. All five questions will carry equal marks. Chandra, P., Project Planning Analysis, Selection, Implementation and Review, Tata McGraw Hill, New Delhi. Hedemey, J.W., Control and Management of Capital Projects, John Wiley, New York. Wysocki, R.K., R. Bick and D. B. Crane, Effective Project Management, John Wiley and Sons, USA. Vasant Desai, Project Management, Himalaya. Only latest editions of the above are recommended. Written Exam: 70 Internal Assessment: 30 Time: 3 Hours Entrepreneurship Development Paper Code: 3.2 Unit-1 Nature and dimensions of entrepreneurship; creativity, innovation and entrepreneurship; entrepreneurship versus...
Words: 6873 - Pages: 28
...and price. Most marketers have three to five price points or tiers. Marriott Hotels is good at developing different brands or variations of brands for different price points - Marriot Vacation Villas (highest price), Marriot (high-medium price), and Fairfield Inn (low prices). Firms devise their branding strategies to help convey the price quality tiers of their products or services to consumers. The firm must consider many factors in setting its pricing policy. Following are the six steps in the process: STEP 1: Selecting the Pricing Objective The company first decides where it wants to position its market offering. The clearer a firm’s objectives, the easier it is to set price. Pricing objectives are goals that describe what an organization wants to achieve through pricing efforts. Developing pricing objectives is an important task because pricing objectives form the basis for decisions about other stages of pricing. A marketer can use both short- and long-term pricing objectives and can employ one or more multiple pricing objectives. The major objectives are: survival, maximum current profit, maximum market share, maximum market skimming, and product quality leadership. Survival – Companies pursue survival as their major objective if they are plagued with over capacity, intense competition, or changing consumer wants. As long as prices cover variable costs and some fixed costs, the company stays in business. Survival is a short-run objective. Maximum current profit...
Words: 3513 - Pages: 15
...PRICE DISCRIMINATION Submitted By: S Date Abstract The aim of this research was to investigate the consumer’s buying behavior related to product differentiation. The report is comprised of three sections. The first section contains the introduction and background about the topic chosen is Product differentiation, the second sections contains the source of reports i.e. from where the data is collected and the last section belongs to the analysis, statistics and summary of the survey which is conducted by the researcher. Dedication A journey of thousand miles Begins with a single step But for that single step, One has to be motivated. This humble effort is dedicated to my sweet Mother & Great Father Who motivated me for That step and has been Guiding me to achieve The heights of an ideal life. Letter of Transmittal Project supervisor & course instructo Respected Ma’am, This letter is a response to the report “Price Discrimination”. The research is conducted to find the impact of price discrimination in our country with respect to the world. This is something which would take the rights of the people belonging to lower class to live in this world. Through this report we can create some awareness and at a snail’s pace we’ll absolutely reach to a conclusion which would b in our favor. Sincerely, Muhammad Najam Absar Taha TABLE OF CONTENTS i. Abstract…………………………………………………………...2 ii. Dedication……………………………………………….......
Words: 3348 - Pages: 14
...Channel and Pricing Strategies Majesty Anderson, Yvonne Davis, Benjamin Holbert & Shawn Hicks Marketing 571 Judy Allen December 17, 2011 Kathy Kudler recently had a business meeting with a top distribution company in Italy that is well known for leading grocery value in sales. Selex a well known grocery distribution company would like to get into the franchising business. Selex is impressed with Kudler’s dominant positioning in Brazil and would like to market and franchise a café known for gourmet cuisines. Selex believes that an upscale café would cater to the market looking for more than just great coffee. According to Country Report on Grocery Retailers in Italy, consumers are likely to remain value-focused and will look to channels and retailers which can provide them with high quality and low-cost products in grocery and household essentials that can be easily obtained. Consumers are faced with shopping in more than one store to provide all items and services needed. Selex feels that with the Café and all the accommodations that Kudler will provide for customers that the Italian market will embrace a one stop grocery store. Pricing Pricing is vital to a company’s growth because it is the only element in the marketing mix that produces revenue. Determining the correct price of a product or service is a complex and difficult task, especially when conducting business in foreign countries. Kudler Foods has decided to accept Selex...
Words: 1773 - Pages: 8
...Course Overview The objective of the subject is to make students conversant with a set of management guidelines which specify the firm’s product-market position, the directions in which the firm seeks to grow and change the competitive tools it will employ, the strengths it will seek to exploit and the weaknesses it will seek to avoid. Strategy is a concept of the firm’s business which provides a unifying theme for all its activities. Course Syllabus Group I: Defining Strategic Management, Characteristics of Strategic Management Types and Hierarchy, Formulation of Strategy: Various Stages and Components of Strategic Management, Determination of various objectives like corporate, divisions and departmental objectives: Vision, Mission and Purpose, Environmental Scanning: Internal & External environment, Types of Strategies, Guidelines for crafting strategies, Tailoring strategies to fit specific Industry. Group II: Strategic Analysis and Choice: Environmental Threat and Opportunity Profile (ETOP), Organizational Capability Profile – Strategic Advantage Profile, Corporate Portfolio Analysis – SWOT Analysis, Synergy and Dysergy – GAP Analysis, Porter’s Five Forces Model of Competition, Mc Kinsey’s 7s Framework, GE 9 Cell Model, Distinctive competitiveness – Selection of matrix while considering all models discussed above, Implementation of strategy: Analysis and development of organizational policies-marketing, production, financial, personnel and management...
Words: 11813 - Pages: 48
...Course Overview The objective of the subject is to make students conversant with a set of management guidelines which specify the firm’s product-market position, the directions in which the firm seeks to grow and change the competitive tools it will employ, the strengths it will seek to exploit and the weaknesses it will seek to avoid. Strategy is a concept of the firm’s business which provides a unifying theme for all its activities. Course Syllabus Group I: Defining Strategic Management, Characteristics of Strategic Management Types and Hierarchy, Formulation of Strategy: Various Stages and Components of Strategic Management, Determination of various objectives like corporate, divisions and departmental objectives: Vision, Mission and Purpose, Environmental Scanning: Internal & External environment, Types of Strategies, Guidelines for crafting strategies, Tailoring strategies to fit specific Industry. Group II: Strategic Analysis and Choice: Environmental Threat and Opportunity Profile (ETOP), Organizational Capability Profile – Strategic Advantage Profile, Corporate Portfolio Analysis – SWOT Analysis, Synergy and Dysergy – GAP Analysis, Porter’s Five Forces Model of Competition, Mc Kinsey’s 7s Framework, GE 9 Cell Model, Distinctive competitiveness – Selection of matrix while considering all models discussed above, Implementation of strategy: Analysis and development of organizational policies-marketing, production, financial, personnel and management...
Words: 11813 - Pages: 48
...of price for transferring goods, services, and assets beyond the national borders of a parent company, known as transfer pricing, remains a controversial challenge. Along with increasing globalization, international transactions between related parties (between parent company and their affiliates or between affiliates) are playing an increasingly significant role in world trade and economy. As multinational enterprises are said to account for about 60% of world trade, transfer pricing has become the number one issue in the international tax arena (Ping and Silberztein 36). There are several different methods utilized to determine transfer pricing. There are strong opinions on the most accurate method to document and report transfer pricing. The most preferred is the arm’s length principle, stating, “it should reflect the prices that would have been set, had those transactions taken place among independent entities” (Houston and Gracon 12). In this paper, I will discuss the difficulty in comparable pricing, the differences of direct tax and customs rules, and firms costly transfer pricing documentation that are all controversial challenges with the arm’s length principle. The Arm’s length principle, most preferred for many years, lacks the ability for a firm to acquire accurate comparable pricing. As Gareth Green, director of Transfer Pricing Solutions in the UK says: ‘Often the only real comparisons are commercially proprietorial transactions, which competing companies...
Words: 1076 - Pages: 5
...situation analysis, selecting and describing a target market, developing marketing strategies and tactical plans and selecting methods to control a marketing plan. 1 YOUR MARKETING PLAN TITLE PAGE Here's your sample Title Page [It's a great idea to put a color picture of your business or product right on the front. But leave room for the following information.] [Your Name] [The month and year the marketing plan is completed] 2 YOUR MARKETING PLAN TABLE OF CONTENTS Here's a sample Table of Contents. Be sure to include the page numbers when you have finished your Marketing Plan. Section: Page Number: I. Mission and Vision Statements II. Company Description III. Marketing Objectives IV. Analysis of the External (Uncontrollable) Environment V. Situation Analysis • Strengths • Weaknesses • Opportunities • Threats VI. Description of the Target Market(s) VII. Marketing Strategies and Tactical Plans • Product Strategies • Distribution Strategies • Pricing Strategies • Promotional Strategies • Positioning Strategy VIII. Methods to Control and...
Words: 1967 - Pages: 8
...market that is led by Ontario Computers. This market is within the basic server segment, where Ontario Computers has 50% market share, meaning that Atlantic has less experience and knowledge of the market in regards to what is valued and expected. A complete evaluation and analysis of the benefits and drawbacks of different pricing strategies will help determine the proper pricing strategy. In addition to the problem of the pricing strategy, Atlantic also has to determine the proper marketing approach for salespeople to utilize in order to communicate the reasoning behind this price. Atlantic will also have to take steps in regards to problems related to our marketing organization. With the upcoming Small and Medium-Sized Enterprise Systems Solution Trade show, Atlantic has the ability to communicate our pricing strategy for the PESA software to potential customers, gauge both the competition’s and customer’s reactions to the pricing strategy and organize the Salesforce and business model in a more effective and efficient manner. Problems * First Problem: Determining Price and Pricing Strategy Firstly, Atlantic’s largest problem is which pricing strategy to utilize and how to create a price to propose to DayTraderJournal.com for the Atlantic bundle. Clearly this issue is the most pressing due to time constraints and will require a close analysis and evaluation of multiple alternatives in order to select the option that is the most desirable....
Words: 2532 - Pages: 11
...Purchase decision- Post-purchase behavior 3. Stages in the adoption process Awareness- Interest- Evaluation- Trial- Adoption 4. Types of buying situations Straight rebuy, Modified rebuy, New task, System selling, Buying centre Chapter6 1. Customer driven marketing strategy -Segmentation -Targeting -Differentiation -Positioning 2. Market segmentation -Segmenting consumer markets -Segmenting business markets -Segmenting international markets -Requirements for effective segmentation * -Measurable, Accessible, Substantial, Differentiable, Actionable 3. Market Targeting -Evaluating market segments *-segment size and growth -segment structure attractiveness -company objectives and resources -Selecting target market segments -Socially responsible target marketing 4. Differentiation and positioning -Positioning maps -Choosing a differentiation and positioning strategy -Communicating and delivering the chose position Chapter7 1....
Words: 721 - Pages: 3
...ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD (Commonwealth MBA/MPA Program) Marketing Management (5565) CHECK LIST Semester: Autumn, 2013 This packet comprises the following material:- 1. Text Book 2. Assignment No. 1, 2 3. Assignment Forms (two sets) 4. Course outline In this packet, if you find anything missing out of the above mentioned material, please contact at the address given below: Mailing Officer Services Block No. 28 Allama Iqbal Open University H-8, Islamabad 051-9057611-12 Majed Rashid Director Overseas Education & E-Learning & Course Coordinator ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD (Commonwealth of Learning Executive MBA/MPA Programme) WARNING 1. PLAGIARISM OR HIRING OF GHOST WRITER(S) FOR SOLVING THE ASSIGNMENT(S) WILL DEBAR THE STUDENT FROM AWARD OF DEGREE/CERTIFICATE, IF FOUND AT ANY STAGE. 2. SUBMITTING ASSIGNMENTS BORROWED OR STOLEN FROM OTHER(S) AS ONE’S OWN WILL BE PENALIZED AS DEFINED IN “AIOU PLAGIARISM POLICY”. Course: Marketing Management (5565) Semester: Autumn, 2013 Level Executive MBA/MPA Total Marks: 100 Instructions a) All written assignment must be well organized, presented in an easy-to-read format, and neat. If your handwriting is not legible, type or compose the written assignment. Moreover, pay particularly close attention to grammar, spelling punctuation and understandability. Communication is extremely important...
Words: 3226 - Pages: 13
