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This document discusses various pricing strategies for new products, including market skimming pricing, market penetration pricing, and product mix pricing strategies. It also covers price adjustment strategies such as discounts, psychological pricing, promotional pricing, geographical pricing, and dynamic pricing. The key strategies discussed are setting either a high price to skim revenues from willing buyers (market skimming) or a low initial price to quickly penetrate the market and gain market share (market penetration pricing). It provides examples of each strategy.
Marketing presentation
- 1. “Pricing Products: Pricing Strategies”Presented By : Maria Pirwani Presented to: Ma’am Amber RazaDated: 4th . April.2011
- 2. New Product Pricing Strategies:What are the essential strategies to price their product?Market Skimming Pricing
- 3. Market Penetration PricingMarket Skimming Pricing:The word skimming means “ Being on the surface”.Setting a high price for a new product to “skim” revenues layer-by-layer from those willing to pay the high price.
- 4. Company makes fewer, but more profitable sales.Market Skimming Pricing: Example:
- 5. Market Penetration Pricing:The word penetration means “Going within the Market”Setting a low initial price in order to “penetrate” the market quickly and deeply.
- 6. Can attract a large number of buyers quickly and win a large market share.
- 7. It may be useful if the product will launch into a new market.Market Penetration Pricing:To quickly penetrate the market, the company launches the product at relatively low price (P1), expecting to sell quantity Q1, and generate revenues equal to P1 times Q1 (the area of the shaded box). The penetration strategy capitalizes on the downward sloping demand curve since the company can pick the price and, within some reasonable bounds, optimize the resulting short-run sales quantity
- 8. Market Penetration Pricing: Example:
- 9. Product Mix Pricing Strategies:Product Line Pricing
- 13. Product Bundle PricingProduct Line Pricing:Involves setting price steps between products in a product line based on cost differences between products and customer perceptions of value.
- 14. Optional Product Pricing :Pricing optional or accessory products sold with the main product (e.g., ice maker with the refrigerator).
- 15. Captive Product Pricing:Pricing products that must be used with the main product.For E.g.:Mobile Phone Battery
- 16. Memory Card Chip
- 17. Laptop ChargerBy Product Pricing :Pricing low-value by-products to get rid of them.For Example:Coal tar is a by-Product of the process of obtaining gas from coal.
- 18. Product Bundle Pricing:Pricing bundles of products sold together (software, monitor, PC, and printer)
- 19. Price Adjustment Strategies:Discount and allowance pricingSegmented pricingPsychological pricingPromotional pricingGeographical pricingDynamic pricingInternational pricing
- 21. Trade-in
- 22. Promotional
- 23. Discounts
- 24. Cash
- 25. Quantity
- 26. Functional
- 27. SeasonalPrice Adjustment Strategies:Segmented pricing:
- 28. Selling a product or service at two or more prices, where the difference in prices is not based on differences in costs.
- 29. Types:
- 30. Customer-segment
- 31. Product-form
- 32. Location pricing (Different Location different Pricing)
- 33. Time pricingPrice Adjustment Strategies:Psychological pricing:Considers the psychology of prices and not simply the economics.Consumers usually perceive higher-priced products as having higher quality.Consumers use price less when they can judge the quality of a product by examining it or recalling experiences.
- 35. Price Adjustment Strategies:Geographical pricing:
- 38. Zone pricing
- 42. Loss leaders
- 46. Free maintenance
- 47. DiscountsPrice Adjustment Strategies:Dynamic pricing:Adjusting prices continually to meet the characteristics and needs of individual customers and situations.International pricing:Adjusting prices for international markets requires consideration of many factors.(For e.g.: Food Industry )
- 48. Enough for today. . .