Download - setting of price
Setting the price
Presented by :Neha koul -Shumali -Vasudha dogra - 67Vidhu arora - 68Arjit gupta - 69Anchal gupta - 70Ridham mahajan -71
What is price ? Price is the one element of the marketing mix that produces revenue
The amount paid for some goods and services.
Pricing is the process whereby a business sets the price at which it will sell its products and services.
Steps in setting price
Step 1: Selecting the Pricing Objective
Survival
Maximum current profit
Maximum market share
Maximum market skimming
Product-quality leadership
Clearer a firms’ objectives, easier it is to set the price.There are five major objective are :
Step 2: Determining Demand
Price
demand
Sensitive : regular items Less sensitive: no substitute, Addiction, infrequently used items
Price
Sensitivity
Surveys Price experiments Statistical analysis
Estimating
demand curve
Elastic demandInelastic demand
Price
elasticity of demand
Step 3: Estimating Costs
Fixed Cost
Variable Cost
Total Cost
Price which covers at least total cost of production at the given level of production is selected.
Step 4 :Analyze competitors’ costs, prices and offers
Offers
Less features
Subtract that value from their own price
More features
Add value to the competitors price
Step 5: Selecting a Pricing Method
Consideration in price setting : 3C’s
• costs set floor to the price • competitors prices and substitute prices provide an orienting
point.• customers’ assessment of unique features establishes ceiling price.
Price setting methods :
• Markup pricing• Target-return pricing• Perceived-value pricing• Value pricing• Everyday low pricing• Going rate pricing• Auction-type pricing
Step 6: Selecting The Final Price
Pricing methods narrow the range from which company must select its final price.
Too high few
buyers
Priced right ???
Too lowToo many buyers