Business Marketing

PRICING METHODS
Pricing Methods
1. Mark Up Pricing Cost + Margin

2. Value Pricing Eg. Zantac

3. Going Rate - Import Parity

4. Distributor/Retailer Cover Losses of Cannibalization

5. Illegal Methods - Price Fixing and Destroyer Pricing

Cost Benefit Trade Off
Value Perceived by the Customer
Premium paid by Customer for extra benefits
Extra benefits will help you in segmenting and pricing
Pricing Across Life cycle
1. Maximize customers
2. ROI- price acceptable across all segments

Strategies

1. Price Skimming
2. Penetration through all Segments
Price Administration
Adjust prices as per the needs of the market
Competition
Segments

Competitive Bidding
- Open Ended
- Closed Ended
Steps for Better Pricing
1. Economic value to the customer

2. Customers perception of the Value

3. Customers price sensitivity (compromises made)

4. Pricing structure (Discounts, Bundling, etc)

5. Competition (Game theory kicks in)

6. Actual realization after returns, etc.)

Thank You