PRICE ADJUSTMENT

STRATEGY
DIFFERENT PRICE
ADJUSTMENT STRATEGY
■ Discount & Allowance Pricing
■ Segmented Pricing
■ Psychological Pricing
■ Promotional Pricing
■ Geographical Pricing
■ International Pricing
 DISCOUNT & ALLOWANCE
Discount is a direct cut off price on purchases within aPRICING
specific time period
or a specific number of quantities. Discount may be:
■ Cash discount: Reduction of price to customers who pay the bills
instantly
■ Quantity discount: Discount on purchasing a large number of products
■ Functional discount: It is given to trade channel members who perform
a certain function like storing, selling and record keeping
■ Seasonal discount: Price reduction for those who purchase product off
season
Allowances are other types of reduction of price. It‘s two
forms.
■ Trade-in allowances: Price reductions for old items when
buying a new one
■ Promotional allowances: Price reductions for participating
in advertising & sales support programs
 SEGMENTED PRICING
It involves in selling of a product or services at two or more
prices where the different in price is not based on different in
cost
■ Customer segment pricing: Different customer pays the
different price for the same product or service
■ Product based pricing: Different versions of the product are
priced differently, but not according to differences in their
costs.
■ Location-based pricing: Company charges the different
price in different locations.
 PSYCHOLOGICAL PRICING
■ It occurs when sellers consider the psychology of price and
not simply the economics
■ For example, a bottle that contains the perfume worth Rs
400 may be purchased willingly by a customer for Rs 1000
because this higher price is considered to be of good quality.
PROMOTIONAL PRICING
■ It is a process in which producer price their products below
list price and sometimes even below cost
■ Such promotional pricing helps the producer to attract more
customer in short period of time
■ It is temporary process.
GEOGRAPHICAL PRICING
■ It simply means charging price according to the location of
customer
■ If the customer are in distance areas than the shipping
charge will be higher.
■ The producer has to charge higher prices to cover the cost
of shipment.
■ So, there may be high chances of loosing customer to
compititors.
INTERNATIONAL PRICING
■ Companies that market their products internationally must
decide what prices to charge in the different countries in
which they operate
■ The price that a company should charge in a specific country
depends on many factors like:
o Economic Conditions
o Competitive Situations
o Laws and regulations
o Consumer perceptions and preferences
o Development of wholesaler and retailer system
THANK YOU!