Price Strategies

Price

CHAPTER OUTLINES…

• Pricing –Meaning & Concepts • Objectives of Pricing, • Factors influencing pricing • Pricing Policies, • Pricing Methods • Managing Price Changes

By

Mr. Subash C. Nath

Pricing –Meaning & Concepts

Price is the exchange value of the goods / services in terms of money; for both the buyers and the sellers.

Price is one of the most flexible elements of the marketing mix.

Price denotes the value of a product expressed in terms of money. The value & utility of a product have to be set against its price.

By

Mr. Subash C. Nath

Continued…

In perfect market, price is determined by supply & demand. Perfect competition means uniformity of price.

By

Mr. Subash C. Nath

Objectives of Pricing

Profit maximization in the short run

Profit optimization in the long run A minimum return on investment A minimum return on sales turnover Achieving a particular sales volume Achieving a particular market share

By

Mr. Subash C. Nath

Continued…

Deeper penetration into the market

Entering new markets Keeping competition out and under check

Fast turnaround and early cash recovery Making commodities affordable by weaker sections

By

Mr. Subash C. Nath

Factors influencing pricing

Internal factors

External factors

By

Mr. Subash C. Nath

Internal factors:

Corporate and marketing objectives of the firm The image sought by the firm through pricing The characteristics of the product

Price elasticity of demand of the product. The stage of the product in its life cycle

Use pattern and the turn around rate of the product

Cost of manufacturing and marketing

Extent of distinctiveness of the product Other elements of the marketing mix of the firm

By

Mr. Subash C. Nath

External factors:

Market characteristics ( these relate to demand, customer and competition) Buyer behavior in respect of the product

Bargaining power of the major customers

Bargaining power of the major suppliers...