Welcome

Chapter-10
Proclaiming value via sustainable pricing
strategies
Presents by
• Umme Rukaiya Mitu
ID No: 11507049
• Salma Akter
ID No: 11507035
A. Introduction
 Sustainable Travel International

* Founded in 2002
* Enabling consumers to lower the carbon cost of travel - Not-for-profit
organization created to reduce the toll that travel and tourism take
on environment
* Founding sponsors include Continental Airlines, United Airlines,
Enterprise Car Rental and several other firms
* Estimates that the carbon cost of the Los Angeles- New York trip at
1.78 tons per person and cost to offset this price is around $ 45.
* STI also offer similar offset programs for auto travel, gifts, events,
conference, home energy usage and hotel stays.
 Price planning process (figure 10-2)
B. Internal pricing constraints

The constraints within the firm reflect the costs incurred to produce, sell
and deliver a product.

* Two types of costs

 Fixed costs: Fixed costs refer to cost factors that do not change in
the short run. Example: investment in real estate and equipment.

 variable costs: Variable costs refer to cost factors that fluctuate

with the amount of product sold. Example: Electricity consumed on
an auto assembly line,

Efforts to enhance the sustainability of product offerings must consider

both cost elements.
C. Customer demand

An understanding of value is necessary if one is to understand how

green marketing benefits can be incorporated into product offering.

Value defining equation:

Value= Desired benefits/ Relative costs

 Sustainable competitive advantage

 Determining value proposition by acquisition, possession, usage,
opportunity costs
D. Legal constraints

The regulatory requirements associated with marketing of products.

Th constraints are established and regulated at the international,

federal/regional ,state and local levels.

 Kyoto Protocol
 Environmental Protection Agency (EPA)
 Clean Air Act (1970)
 Clean Water Act (1972)
 California Global Warming Act (2006)
E. Competitive Action
 Consider the nature of the market
 Evaluate the size of the green consumer segment in the
marketplace
 Consider the consumer attitude with competitive landscape
 analysis of market factors
 Lean green and defensive green marketing strategies
 The extreme green strategy
 The shaded green strategy
F. Corporate mission and pricing
objectives
 Consistent with the overall objective of the firm
 Ensure or maintain a presence in the firm
 Carry an image about the firm and its products
 achieve some level of market share
 Targeted returns and market share
 Strategy implication
G. Pricing strategies

1) Carbon offset pricing

2) Competitive pricing
i) Break-even pricing
ii) Cost based pricing
iii) Value based pricing
iv) Status quo pricing
v) Skimming pricing’
vi) Penetration pricing

3) Product line pricing

Thank You