Professional Documents
Culture Documents
Chapter Eleven
Chapter Eleven
Pricing Strategies
• Market-skimming
pricing
• Market-
penetration pricing
Optional- Captive-
Product
product product
line pricing
pricing pricing
Product
By-product
bundle
pricing
pricing
Pricing Strategies
Pricing Strategies
Pricing Strategies
Discount and
Segmented
allowance
pricing
pricing
Psychological Promotional
pricing pricing
Pricing Strategies
Discount and allowance pricing reduces
prices to reward customer responses such
as paying early or promoting the product
• For early payment of bills, volume
purchase, off season buying etc.
• Cash discount like 2/10 net 30
• Allowances- Like trade in Allowance or
promotional allowance
Copyright © 2010 Pearson Education, Inc.
Chapter 11- slide 12
Publishing as Prentice Hall
Price-Adjustment Strategies
Pricing Strategies
• Price cuts
• Price increases
Price
Price cuts
increases
• Product is more • New models
better/exclusive will be available
• Company is • Models are not
greedy selling well
• Quality issues
Questions
– Why did the competitor change the price?
– Is the price cut permanent or temporary?
– What is the effect on market share and profits?
– Will competitors respond?
Solutions
– Reduce price to match competition
– Maintain price but raise the perceived value
through communications
– Improve quality and increase price
– Launch a lower-price “fighting” brand