Session 6

Pricing

Copyright © 2009 Pearson Education, Inc.  

Chapter 10- slide 1
Publishing as Prentice Hall
 What Is a Price?

Price is the amount of money charged for a

product or service. It is the sum of all the
values that consumers give up in order to
gain the benefits of having or using a
product or service.

Copyright © 2010 Pearson Education, Inc.  

Chapter 10- slide 2
Publishing as Prentice Hall
 What Is a Price?

Price is the only

element in the
marketing mix
that produces
revenue; all other
elements
represent costs

Copyright © 2010 Pearson Education, Inc.  

Chapter 10- slide 3
Publishing as Prentice Hall
 Factors to Consider When
Setting Prices
Customer Perceptions of Value

Copyright © 2010 Pearson Education, Inc.  

Chapter 10- slide 4
Publishing as Prentice Hall
 Factors to Consider When
Setting Prices
Customer Perceptions of Value

Copyright © 2010 Pearson Education, Inc.  

Chapter 10- slide 5
Publishing as Prentice Hall
 Factors to Consider When
Setting Prices
Customer Perceptions of Value

Copyright © 2010 Pearson Education, Inc.  

Chapter 10- slide 6
Publishing as Prentice Hall
 Factors to Consider When
Setting Prices
Break-Even Analysis and Target Profit Pricing

Copyright © 2010 Pearson Education, Inc.  

Chapter 10- slide 7
Publishing as Prentice Hall
 Factors to Consider When
Setting Prices
Other Internal and External Consideration Affecting Price Decisions

Competition

Copyright © 2010 Pearson Education, Inc.  

Chapter 10- slide 8
Publishing as Prentice Hall
 Factors to Consider When
Setting Prices
Other Internal and External Considerations
Affecting Price Decisions

Copyright © 2010 Pearson Education, Inc.  

Chapter 10- slide 9
Publishing as Prentice Hall
 Factors to Consider When
Setting Prices
Other Internal and External
Considerations Affecting Price
Decisions
Price elasticity of demand illustrates the response of demand to a
change in price

Inelastic demand occurs when demand hardly changes when there is a small
change in price

Elastic demand occurs when demand changes greatly for a small change in price

Price elasticity of demand = % change in quantity demand

% change in price

Copyright © 2010 Pearson Education, Inc.  

Chapter 10- slide 10
Publishing as Prentice Hall
 Factors to Consider When
Setting Prices
Other Internal and External Considerations
Competitor's Strategies

• Comparison of offering in
terms of customer value
• Strength of competitors
• Competition pricing strategies
• Customer price sensitivity

Copyright © 2010 Pearson Education, Inc.  

Chapter 10- slide 11
Publishing as Prentice Hall
 Factors to Consider
When Setting Prices
Other Internal and External Consideration Affecting Price Decisions

Copyright © 2010 Pearson Education, Inc.  

Chapter 10- slide 12
Publishing as Prentice Hall
 New-Product Pricing Strategies
Pricing Strategies

• Market-skimming
pricing
• Market-
penetration pricing

Copyright © 2010 Pearson Education, Inc.  

Chapter 10- slide 13
Publishing as Prentice Hall
 Product Mix Pricing Strategies
Pricing Strategies

Copyright © 2010 Pearson Education, Inc.  

Chapter 10- slide 14
Publishing as Prentice Hall
 Price-Adjustment Strategies

Copyright © 2010 Pearson Education, Inc.  

Chapter 10- slide 15
Publishing as Prentice Hall