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17 Cards in this Set
- Front
- Back
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1. Development of Pricing Objectives (goals)
- What can price do for us? |
Survival
Profit Market Share Cash Flow Product Quality |
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Survival
(#1) |
At least break even/#1
**Most Important |
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Profit (#1) |
Maximize $$ (long-term)
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Market Share
(#1) |
"A firm's sales in relation to total industry sales"
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Cash Flow
(#1) |
Make $$ as quickly as possible
(short-term) Higher price than normal |
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Product Quality
(#1) |
Higher Price
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2. Assessment of the Target Market's Evaluation of Price
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-Type of product
-Type of target market -Purchase situation (how quickly the consumer needs product? |
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Step 3?
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Evaluation of Competitors' Pricing
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4. Selection of a Basis for Pricing
(calculation of price and what formula/method) |
-Cost-Based Pricing
-Demand-Based Pricing Competition-Based Pricing (Bad Idea) |
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Demand-Based Pricing
(#4) |
Organizations sets price for product depending on how much consumer is demanding.
Demand ^ = Price ^ |
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Price Differentiation
(#4) |
Using more than one price in the same market for the same product
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5. Selection of a Pricing Strategy
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How can we sell more product based on price
a. Pioneer b. Psychological Pricing c. Professional Pricing d. Promotional Pricing |
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Pioneer
(Selection of pricing strategy) |
(New Product Pricing)
- Price Skimming = Price starts high moves to low - Penetration Pricing = Starts low, stays low ($) |
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Psychological Pricing
(Selection of pricing strategy) |
Organization uses consumer perceptions to sell more.
-Everyday low prices (EDLP) Ex: Walmart -Prestige pricing = charging artificially high price to establish an image |
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Professional Pricing
(Selection of pricing strategy) |
-Fees set by a person (usually service providers) who have great skill or experience in a particular field.
Ex: Health Care (Surgeons) |
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Promotional Pricing
(Selection of pricing strategy) |
Used by retailers through trying to increase store traffic.
-Price Leaders -Special-Event Pricing (sales) -Comparison/Superficial Discounting (was/is pricing = was $24.95 NOW $14.95) |
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6. Determination of a Specific Price
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Most don't do this instead they do trial and error
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