Good Morning!

IN THIS CLASSROOM WE….

PRICING

PRINCIPLES OF
MARKETING
ABM 12
Review: Jargon Snipers! Match different price jargons used in
different industries

Jargons Industry/Organization
Fees Government
Interest Insurance
Premium Motorway/ Road
Fares Netflix
Tolls Airlines
Subscription Bank
Tax Lawyer
Jargon Snipers!
Match different
price jargons used
in different
Fees
Lawyer
industries
Jargon Snipers!
Match different
price jargons used
in different
Interest
Bank
industries
Jargon Snipers!
Match different
price jargons used
in different
Premium
Insurance
industries
Jargon Snipers!
Match different
price jargons used
in different
Fares
Airlines
industries
Jargon Snipers!
Match different
price jargons used
in different
Tolls
Road/Motorway
industries
Jargon Snipers!
Match different
price jargons used
in different
Subscription
Netflix
industries
 Identify and describe the factors to
OBJECTIVES consider when setting prices
OF THE
LESSON Identify general pricing
approaches
Pre-Test
 How Much Would Why More/Less
You Expect to Pay? Value?
 
Activity: How much will (PART A) (PART B)

you pay?
At a supermarket
1
(on shelf, not cold)

 Part A: How much would 2 At the School canteen

you be willing to pay for a 3 At a convenience store (711)

bottle of Coke mismo at
the list of situations/places 4 At McDonalds

on the list.
5 At an expensive restaurant
 Part B: Try to identify
why you might perceive 6 At the movies

extra (or less) amount in

At a sari sari Store
these situations/places.
7

8 At the Port (Batangas Port)

 Activity: How much are you willing to pay
Let’s Talk About It!

1.What have you observed from the

activity?
2.How did you come up with the price?
What did you consider?
Factors Influencing Price

Cost

Demand

Market and Competition

Product Life Cycle

Company’s Objective and Approach

Factors Influencing Price

Cost

Price needs to cover the cost of production and distribution of a

product. It also should include a margin of profit for the manufacturer.
Thus, the cost of production should be considered before fixing the
price of a product.
Factors Influencing Price

Demand

Price is set at a level which there is the desired impact on

the product demand.
Factors Influencing Price

Market and Competition

If your market has lots of

firms selling similar products,
then your prices have to be
competitive. If you offer a
different product, you will be
able to charge more.
 Product Life
Factors Cycle
Influencing
Price 1. Introduction
2. Growth
3. Maturity
4. Decline
 Company’s Objective and Approach

Factors objectives including –

Influencing 1. profit maximization
2. market share maximization
Price 3. maximization of customer value
4. maintaining image and position
GENERAL APPROACHES TO PRICES

1 2 3
Cost-based Pricing Value-based Pricing Competition-based
Approach Approach Pricing Approach
 GENERAL APPROACHES TO PRICES
Cost-based Pricing Approach – making
something then get people to buy it
• Determine the cost to make the
Cost product/services
• Set the price based on said cost
• Get consumers to buy the product by
convincing them of product value

Value-based Pricing Approach –figuring out

what people want and make it
• Determine consumer needs and wants and their
perception on value
Value • Determine a target price to match the
consumer’s perceive value
• Assess the costs that it will take to produce
product
• Come up with the product
GENERAL APPROACHES TO PRICES

3. Competition-based Pricing Approach

You mainly look for the priced of
already existing products offered by
your competitors
The price may be at the same level,
below current competitors, or above
them
Activity: The Price is Just Right!

Directions:
 Supposed you will create/ you have your own product/services
 Set the price according to three different approaches and explain why
you come up with that price.
 present your output infront of the class
 You are given five (5) minutes to prepare your output
Activity: The
Price is Just
Right!
Activity: Mini Debate

Directions:
 Present an oral argument using evidence; use functional language related to agreeing, disagreeing, and
showing contrasting opinions.
 5 minutes to brainstorm evidence (information, facts, examples, etc) to support your debate position

Goal is to make a convincing yet respectful argument

 Topic : It’s not fair when people pay different prices for the same thing
Making generalizations...

Why do you think the correct price for a

product is so important? What are the
implications of getting it wrong?
1. Above the competition (premium pricing)
Setting a premium price above market value can be
effective if the company demonstrates that the
product or service is somehow superior to the
competition. This could mean a more significant
investment in marketing to position the brand as
‘luxury’, added features, or favorable customer
terms like extended warranties.
2. The same as the competition (price matching)
Price-match promises are a common competition-based
pricing strategy companies use to stop customers from
switching to competitors for a better price. With this
competitor-based pricing strategy, companies promise to
offer the same price as their competitors for identical
products. Branding and marketing also allow companies
to remain competitive while differentiating themselves.
3. Below the competition (loss leader pricing)
Intentionally setting prices below competitor selling
prices (also known as loss leader pricing) can
effectively grow market share and revenue in the
short term. Marketing yourself as the lowest cost
option is a genuine pricing strategy, but it can affect
profitability and damage perceived value in the
long term.
Competitor based pricing can help you get
there if done correctly. Remember, 
pricing is a process that works to eliminate as
much doubt as possible for a key stakeholder
to make a profit maximizing decision. Think of
pricing as a game of darts where you’re trying
to hit a bullseye with the perfect price, but
there’s all that extra space to “distract” your
dart. Data eliminates that space, paring down
the dartboard as much as possible to guide
your dart.
Thank You!