BENEDICITE!

CHAPTER 10
TOPIC: PRICING STRATEGY
Group 2:
DE LEON,JEZYL D. BSBA-HRDM2
NATIVIDAD, MERIEL BSBA-FM2
PEREZ, JOHN GEEBE BSBA-HRDM2
MARTINEZ, MIGUEL BSBA-HRDM2

Saint Peter’s College of Ormoc, Inc.

A member of the Association of Benedictine Schools
Saint Peter’s College of Ormoc, Inc.
A member of the Association of Benedictine Schools
What is a PRICING STRATEGY?

-Pricing strategies refer to the processes and methodologies businesses use

to set prices for their products and services.It is one of the four Ps of
marketing, along with product, place, and promotion.A good pricing strategy
can help businesses achieve their revenue goals, market share objectives, and
brand positioning.

-If pricing is how much you charge for your products,

then product pricing strategy is how you determine what
that amount should be.

Saint Peter’s College of Ormoc, Inc.

A member of the Association of Benedictine Schools
PRICING PRACTICES
-Pricing practices are the specific tactics that businesses use to
implement their pricing strategies.

Some common pricing practices include:

Cost-plus pricing- Calculate your costs and add a mark-up.

Competitive pricing- Set a price based on what the competition
charges.
Price skimming- Set a high price and lower it as the market evolves.
Penetration pricing- Set a low price to enter a competitive market and
raise it later.
Value-based pricing- Base your product or service’s price on what the
customer believes it’s worth.

Saint Peter’s College of Ormoc, Inc.

A member of the Association of Benedictine Schools
“PRICING MODELS”
While your pricing strategy may determine how your company sets fees for its offerings
overall, the below pricing models can help you set prices for specific product lines.

1. Freemium
A combination of the words “free” and “premium,” freemium pricing is when companies offer
a basic version of their product hoping that users will eventually pay to upgrade or access more
features.

2. Premium Pricing
Also known as prestige pricing and luxury pricing, a premium pricing model is when companies
price their products high to present the image that their products are high-value, luxury, or
premium.

3. Hourly pricing
Also known as rate-based pricing, is commonly used by consultants, freelancers, contractors,
and other individuals or laborers who provide business services.

Saint Peter’s College of Ormoc, Inc.

A member of the Association of Benedictine Schools
4. Bundle pricing
Is when you offer (or "bundle") two or more complementary products or services
together and sell them for a single price.
5. Project-based pricing

Is the opposite of hourly pricing — this approach charges a flat fee per project instead
of a direct exchange of money for time. It is also used by consultants, freelancers,
contractors, and other individuals or laborers who provide business services.

6. Subscription pricing
Is a common pricing model at SaaS companies, online retailers, and even agencies
who offer subscription packages for their services.

Saint Peter’s College of Ormoc, Inc.

A member of the Association of Benedictine Schools
“PRICING METHODS”
Pricing methods are the specific techniques that businesses use to
calculate their prices.

Some common pricing methods include:

Markup pricing: Adding a markup to the cost of a product or service to

determine the selling price.
Target costing: Setting a selling price based on the desired profit margin
and
then working backwards to determine the cost of production.
Value pricing: Setting a price based on the value that the product or
service provides to customers.
Competitive pricing: Setting a price based on what competitors are
charging.
Saint Peter’s College of Ormoc, Inc.
A member of the Association of Benedictine Schools
 “PRICE POSITIONING”
Price positioning is the process of determining how a product or service will be
perceived by customers in terms of price. Businesses can position their products
and services as high-end, premium, mid-range, or budget-friendly.

Real life examples of price positioning:

Jollibee: Jollibee is positioned as a fast food restaurant that offers affordable and
delicious meals to Filipino families. Its prices are lower than those of its competitors,
such as McDonald's and KFC.
SM Malls: SM Malls are positioned as accessible and affordable shopping malls for
Filipino consumers. Its prices are lower than those of its competitors, such as Ayala
Malls and Robinsons Malls.

Saint Peter’s College of Ormoc, Inc.

A member of the Association of Benedictine Schools
“OPTIMIZATION OF STRATEGIES”
Once a business has selected a pricing strategy, it is important to monitor and
optimize it over time. This involves tracking key metrics such as sales, profit
margins, and customer satisfaction. Businesses can also use data analytics to
identify trends and opportunities to improve their pricing strategies.

Real life examples of optimization of strategies:

Shopee: Shopee uses optimization Foodpanda: Foodpanda uses optimization

strategies to increase sales and
customer engagement. For example,
it uses product recommendations
and personalized promotions to
encourage customers to buy more.
strategies to improve the delivery time and
customer satisfaction of its food delivery
service. For example, it uses a similar route
optimization algorithm to plan the most
efficient routes for its food delivery riders.

Saint Peter’s College of Ormoc, Inc.

A member of the Association of Benedictine Schools
IMPLICATION OF PRICE LEVELS
-Price levels have a number of implications for businesses and consumers. For businesses,
price levels can affect profitability, market share, and brand image. For consumers, price
levels can affect affordability, perceived value, and purchase decisions.

Here are some examples of how price levels

can impact businesses and consumers:

-A business that sets high prices may be able to generate higher profits, but it may also
have a smaller market share.
-A business that sets low prices may be able to attract more customers and increase its
market share, but it may also have lower profits.
-A consumer who is on a tight budget may be more likely to purchase products and
services that are priced lower.
-A consumer who is looking for a premium product or service may be more willing to pay
a higher price.

Saint Peter’s College of Ormoc, Inc.

A member of the Association of Benedictine Schools
 Here are some specific examples of the implications of price levels:

- If the price level of food increases, it can lead to food insecurity for low-
income households.
- If the price level of housing increases, it can make it more difficult for
people to afford to buy or rent homes.
- If the price level of goods and services exported by a country increases, it
can make those goods and services less competitive in the global market.
- If the price level of goods and services imported by a country decreases, it
can make those goods and services more affordable for consumers and
businesses.

Saint Peter’s College of Ormoc, Inc.

A member of the Association of Benedictine Schools
 SUMMARY!

Overall, pricing strategy is a complex and nuanced process that requires

businesses to consider a variety of factors. By carefully considering all of
the relevant factors, businesses can develop pricing strategies that help
them achieve their goals.

Saint Peter’s College of Ormoc, Inc.

A member of the Association of Benedictine Schools
 THAT IN ALL THINGS,
GOD MAY BE GLORIFIED!

Saint Peter’s College of Ormoc, Inc.

A member of the Association of Benedictine Schools