Location via proxy:   [ UP ]  
[Report a bug]   [Manage cookies]                
Scribd Logo
Upload

Welcome to Scribd!

  • 52 views

    Global Pricing Strategy

    Uploaded by

    Ramyata Mahajan
    The document discusses various pricing strategies and factors that companies consider when determining prices. It explains that pricing involves setting a price for a company's products based on manufacturing costs, market conditions, competition, and product quality. It then provides descriptions and examples of different pricing strategies, including penetration pricing, skimming pricing, value-based pricing, price leadership, tender pricing, price discrimination, and predatory pricing.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd

    Global Pricing Strategy

    Uploaded by

    Ramyata Mahajan
    52 views35 pages
    The document discusses various pricing strategies and factors that companies consider when determining prices. It explains that pricing involves setting a price for a company's products based on manufacturing costs, market conditions, competition, and product quality. It then provides descriptions and examples of different pricing strategies, including penetration pricing, skimming pricing, value-based pricing, price leadership, tender pricing, price discrimination, and predatory pricing.

    Copyright

    © Attribution Non-Commercial (BY-NC)

    Available Formats

    PPTX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The document discusses various pricing strategies and factors that companies consider when determining prices. It explains that pricing involves setting a price for a company's products based on manufacturing costs, market conditions, competition, and product quality. It then provides descriptions and examples of different pricing strategies, including penetration pricing, skimming pricing, value-based pricing, price leadership, tender pricing, price discrimination, and predatory pricing.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    52 views35 pages

    Global Pricing Strategy

    Uploaded by

    Ramyata Mahajan
    The document discusses various pricing strategies and factors that companies consider when determining prices. It explains that pricing involves setting a price for a company's products based on manufacturing costs, market conditions, competition, and product quality. It then provides descriptions and examples of different pricing strategies, including penetration pricing, skimming pricing, value-based pricing, price leadership, tender pricing, price discrimination, and predatory pricing.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 35

    Manish Sharma - 06 MBA-IB 12 Saniya Mahajan - 19 MBA-IB 12

    Global Pricing Strategy 1

    Pricing is the process of determining what a company will receive in exchange for its products. Pricing factors:

    Manufacturing cost Market place Competition Market condition Quality of product

    Global Pricing Strategy

    Pricing is a fundamental aspect of financial modelling. One of the four Ps of the marketing mix. The other three aspects are Product, Promotion, and Place. Price is the only revenue generating element amongst the four Ps, the rest being cost centres.

    Global Pricing Strategy

    Global Pricing Strategy

    Global Pricing Strategy

    Price set to penetrate the market. Low price to secure high volumes. Typical in mass market products chocolate bars, food stuffs, household goods, etc. Suitable for products with long anticipated life cycles. May be useful if launching into a new market.

    Global Pricing Strategy

    Global Pricing Strategy

    High price, Low volumes. Skim the profit from the market. Suitable for products that have short life cycles or which will face competition at some point in the future (e.g. after a patent runs out). Examples include: PlayStation, jewellery, digital technology, new DVDs, etc.

    Global Pricing Strategy

    Global Pricing Strategy

    Price set in accordance with customer perceptions about the value of the product/service. Examples include status products/exclusive products.

    Global Pricing Strategy

    10

    Global Pricing Strategy

    11

    Goods/Services deliberately sold below cost to encourage sales elsewhere. Typical in supermarkets, e.g. at Christmas, selling bottles of gin at 3 in the hope that people will be attracted to the store and buy other things. Purchases of other items more than covers loss on item sold.

    Global Pricing Strategy

    12

    Global Pricing Strategy

    13

    Used to play on consumer perceptions. Example - 9.99 instead of 10.99! Links with value pricing high value goods priced according to what consumers think should be the price.

    Global Pricing Strategy

    14

    Global Pricing Strategy

    15

    In case of price leader, rivals have difficulty in competing on price too high and they lose market share, too low and the price leader would match price and force smaller rival out of market. Where competition is limited, going rate pricing may be applicable banks, petrol, supermarkets, electrical goods find very similar prices in all outlets.

    Global Pricing Strategy

    16

    Global Pricing Strategy

    17

    Many contracts awarded on a tender basis. Firms submit their price for carrying out the work. Purchaser then chooses which represents best value. Mostly done in secret.

    Global Pricing Strategy

    18

    Global Pricing Strategy

    19

    Charging a different price for the same good/service in different markets. Requires each market to be impenetrable. Requires different price elasticity of demand in each market.

    Global Pricing Strategy

    20

    Global Pricing Strategy

    21

    Deliberate price cutting or offer of free gifts/products to force rivals (normally smaller and weaker) out of business or prevent new entrants. Anti-competitive and illegal if it can be proved.

    Global Pricing Strategy

    22

    Global Pricing Strategy

    23

    Full Cost Pricing Attempting to set price to cover both fixed and variable costs. Absorption Cost Pricing Price set to absorb some of the fixed costs of production.

    Global Pricing Strategy

    24

    Global Pricing Strategy

    25

    Marginal cost the cost of producing one extra or one fewer item of production. MC pricing allows flexibility. Particularly relevant in transport where fixed costs may be relatively high. Allows variable pricing structure.

    Global Pricing Strategy

    26

    Global Pricing Strategy

    27

    Contribution = Selling Price Variable (direct costs) Prices set to ensure coverage of variable costs and a contribution to the fixed costs. Similar in principle to marginal cost pricing. Break-even analysis might be useful in such circumstances.

    Global Pricing Strategy

    28

    Global Pricing Strategy

    29

    Setting price to target a specified profit level. Estimates of the cost and potential revenue at different prices, and thus the break-even have to be made, to determine the mark-up. Mark-up = Profit/Cost x 100

    Global Pricing Strategy

    30

    Global Pricing Strategy

    31

    Calculation of the Average Cost (AC) plus a mark up. AC = Total Cost/Output

    Global Pricing Strategy

    32

    Global Pricing Strategy

    33

    Any pricing decision must be mindful of the impact of price elasticity. The degree of price elasticity impacts on the level of sales and hence revenue. Elasticity focuses on proportionate (percentage) changes. PED = % Change in Quantity demanded % Change in Price

    Global Pricing Strategy

    34

    Global Pricing Strategy

    35

    You might also like