PGDM- IV

RURAL MARKETING

Arun Kumar Deshmukh,

Faculty, Marketing Group,
SBM, JNU, Jaipur
arund178@gmail.com
Arundeshmukh.hpage.com

MM-Pricing Objectives and 1

Strategies
 Session 30:
Pricing Strategies for Rural
Market
 Main Points
1. Major Problems in Pricing Strategies

2. Setting the Price for the First Time

3. Selecting Pricing Objectives
4. Selecting Pricing Method
5. Selecting Final Price

MM-Pricing Objectives and 3

Strategies
Major Problems in Pricing Strategies

• How to set up price on a product for the

first time ?
• How to modify a product’s price to meet
changes in marketing environment ?
• How to initiate and respond to price
changes ?

MM-Pricing Objectives and 4

Strategies
 Selecting the Pricing Objectives
 Consider Marketing Plan
A) Target market selected; and

B) Desired positioning and brand image

 Pricing Objective
A) Survival
B) Current profit maximisation
C) Market share leadership
D) Product quality MM-Pricing
leadership Objectives and 5
Strategies
 Pricing Objectives can also be
regrouped as….
• Profit-oriented
– To achieve a target return
– To maximise profits
• Sales-oriented
– To increase sales volume
– To maintain or increase market share
• Status quo-oriented
– To meet competition
– To stabilise prices / Non-price competition

MM-Pricing Objectives and 6

Strategies
 Factors Influencing Price
Determination
• Estimated Demand
• Competitive Reactions
– Directly similar products
– Available substitutes
– Unrelated products seeking the same customer
outlay
• Other Marketing-mix Elements, and
• Cost of the Product

MM-Pricing Objectives and 7

Strategies
Selecting a Pricing Method / Strategy

1. Cost plus pricing

2. Target profit pricing (Target ROI)
3. Perceived value pricing
4. Follow the leader / going rate pricing
5. Sealed bid pricing
6. Marginal costing
MM-Pricing Objectives and 8
Strategies
 The Price Determination Process
Select pricing objective

Select method to determine the base price:

Cost-plus Price based on Price set in
Pricing both demand relation to
and costs market alone

Design appropriate strategies

Price vs nonprice Geographic pricing High-low vs
competition One price vs flexible everyday low
Skimming vs penetration pricing price Reactive vs
Discounts and allowances Leader pricing proactive changes
9
 Selecting Final Price
• Psychological Pricing
• Company Policy
• Influence of other Marketing - Mix Elements
• Other Factors - Effects on :
1. Distributors and dealers
2. Company sales force
3. Competitors
4. Government interference
MM-Pricing Objectives and 10
Strategies
 Four Introductory Marketing
Strategies
Promotion
High Low
Rapid- Slow-
High skimming skimming
strategy strategy
Price Sony
Rapid Slow
Low penetration penetration
strategy strategy
Nirma Babool, Vicco
Vajradanti

MM-Pricing Objectives and 11

Strategies
 Nine Price / Quality Strategies
Price
High Medium Low

1. Premium 2. High-value 3. Superb-value

Product Quality

High
strategy strategy strategy

Medium 4. Overcharging 5. Medium-value 6. Good-value

strategy strategy strategy

Low 7. Rip-off 8. False economy 9. Economy

strategy strategy strategy

MM-Pricing Objectives and 12

Strategies
 Setting the Price for the First Time

• Selecting the pricing objective

• Determining demand
• Estimating costs
• Analysing competitors’ prices and offers
• Selecting a pricing method; and
• Selecting the final price

MM-Pricing Objectives and 13

Strategies
Thank You

MM-Pricing Objectives and 14

Strategies