BMK 2614

PRINCIPLES OF MARKETING ASSIGNMENT

TRI 3 2012/2013

PART C: NEW PRICING STRATEGIES

Price is the amount of money charged for a certain products or services.

Price also defined as the sum of the values that customers exchange for the benefits of

owning or using the products or services.

Price plays an important role in creating customer value and building customer

relationship.
The pricing objectives include sales volume, profit and market growth.
Customer value perception, costs, competitor strategies, overall marketing strategy,
objectives, marketing mix and environmental factors affect the price decision.

A. Customer Value-Based Pricing

It can be defined as considering buyers perceptions of value rather than on the
sellers cost when setting price of the product, that is Milo-ath.
Customer value-based pricing uses buyers perceptions of value as the means to
pricing.
Value-based pricing starts with assessing customer needs and value perceptions,
setting target price to match customer perceived value, determining costs that can be
incurred and designing product to deliver desired value at target price.
We evaluate customer operation and interviews with customer personnel to
understanding customer value.
Value-added pricing strategies, which is under customer value-based pricing, is
attaching value-added features and services to differentiate a companys offers while
charging high prices.
Rather than compete with other competitors by reducing price, we boosted quality and
value of our product by changing the nutrition proportion that an athlete need and
make it as a can to convenient our target consumers.
This will differentiate ourselves with the competitors so that we can charge a higher
price per can.

B. Psychological pricing
Psychological pricing is pricing that considers the psychology of prices.
Psychological pricing uses consumers emotional response to push the sales without

significantly reduces the price of the product.

We set the price per can is RM2.49 instead of RM2.50 per can.

BMK 2614

PRINCIPLES OF MARKETING ASSIGNMENT

TRI 3 2012/2013

This will make the consumers to believe that they are buying at a lower price even
though there are small differences in price which is only RM0.01.

C. Segmented Pricing
Segmented pricing is selling a product or services at two or more prices, where the
difference in prices is not based on differences in costs.
Segmented pricing takes several forms:
i.
Customer-segment pricing
It means that different customers pay different prices for the same
product and services.
For the Milo-ath, we will charge a lower price which is RM2.30 per
ii.

can instead of RM2.49 to the doctors, instructors and others.

Location-based pricing
Different prices can be charged for different locations even though the
cost of offering for each location is the same.
We will charge higher price per can sold in the shopping complex or
retailer shop, but charge a lower price per can sold in the athletes

iii.

shop.
Time-based pricing
The price of Milo-ath per can varies by the season, the month, the day,
and even the hour.
We will charge a lower price of Milo-ath per can at normal season but
will charge a higher price of Milo-ath per can at OLYMPIC GAMES,
SEA GAMES and others.

D. Promotional Pricing
Promotional pricing strategy is a strategy where the price of a product and services is
reduced temporarily in order to attract more customers and develop loyalty.
Promotional pricing includes:
i.
Limited-time offers
Sellers can use limited-time offers technique to attract more buyers.
This can create buying urgency and make buyers feel lucky to have
this deal.
The deal includes buying two can of Milo-ath at RM4.50 or having
lucky draw chances when buying one can of Milo-ath.
This technique is temporarily as too much promotional pricing can
have adverse effects.

BMK 2614

PRINCIPLES OF MARKETING ASSIGNMENT

TRI 3 2012/2013