Presentation On Pricing Policies

BY
MOHD.MOHSIN
MANSOORI
Contents

 Cost Based Pricing

 Demand Based Pricing
 Competition –Oriented Pricing
 Product line pricing
 Tender Pricing
 Affordability-Based
 Differentiated Pricing
Cost-Based Pricing

 Mark-up pricing(Cost plus pricing)

 Absorption cost pricing(Full cost pricing)
 Target rate of return pricing
 Marginal cost pricing
Mark-up pricing
 Markup is the difference between the 
cost of a good or service and its selling
price.
Absorption cost pricing
 The Absorption Costing
method (also: Full Costing) is an
costing model that includes all
manufacturing costs.
Target rate of return pricing
 A method of pricing that estimates the
desired return on investment to be
achieved from the
fixed and working capital investment and
includes thatreturn in the price of a
product/service.
Marginal cost pricing
 the practice of setting the price of a
product to equal the extra cost of
producing an extra unit of output.
Demand based pricing
 What the traffic can bear pricing:
The seller sets the maximum price that the
customers are willing to pay for the product under
the given circumstances
Demand Based Pricing
 Skimming Pricing:
Selling a product at a high price,
sacrificing high sales to gain a high profit,
therefore ‘skimming’ the market

 Penetration Pricing: The price is deliberately

set at low level to gain customer's interest and
establishing a foot-hold in the market
Competiton oriented pricing
 Premium pricing:
It means pricing above the level adopted by the
competitors
 Discount pricing:
pricing below competitors pricing level

 Parity pricing: It means matching competitors pricing