Pricing

Strategies
PHILIP C. CHENG
Discussion Outline
(Introduction to Pricing)
➢Review of Fundamentals of Marketing
❖Marketing Mix
➢Price
➢Understanding Pricing
❖A Changing Pricing Environment
➢How do Companies Price?
➢Consumer Psychology and Pricing
❖Reference Pricing
❖Price Quality
❖Price Ending
Marketing (Defined)
Marketing is a societal process by which
individuals and groups obtain what they need and
want through creating, offering, and freely
exchanging products and services of value with
others.
- Philip Kotler
Demand (Defined)

Demand is an economic principle

referring to a consumer’s ability to
purchase goods and services and
willingness to pay a price for a specific
good or service
Demand (Illustrated)
PRODUCT ABILITY WILLINGNESS SALE???

A ☑️ ✖️ ✖️

B ✖️ ☑️ ✖️

C ☑️ ☑️ ☑️
Marketing Mix
Is the set of controllable variables that the
firm can use to influence the buyer's
response.
MARKETING The Four P’s of Marketing
MIX The Four C’s of Customer
Marketing
Mix
Place
of
Product
Distribution

Customer Convenience
Solution Price Promotion

Customer Communication
Cost
Price
Refers to the monetary value of a
product.
Understanding Pricing
A Changing Pricing Environment
Buyers can:
➢Get instant price comparisons from thousands of vendors.
➢Name their price and have it met.
➢Get products free

Sellers can:
➢Monitor customer behavior and tailor offers to individuals
➢Give certain customers access to special prices
➢Negotiate prices in online auctions and exchanges or even in person
How do companies PRICE?
 Consumer Psychology
and Pricing
Understanding how consumers arrive at their
perceptions of prices is an important
marketing priority. Here we consider three
key topics—reference prices, price–quality
inferences, and price endings.
 Reference Pricing
Possible Consumer Reference Prices

• “Fair Price” (what consumers feel the product should cost)

• Typical Price
• Last Price Paid
• Upper-Bound Price (the maximum most consumers would pay)
• Lower-Bound Price (the minimum most consumers would pay)
• Historical Competitor Prices
• Expected Future Price
• Usual Discounted Price
Price Quality
Price Endings
Philip C. Cheng
Pricing Strategy Class
AY 2021-2022
2nd Semester
Lady of Lourdes Colleges of Caybiga
Lecture Series No. 1