for use with shapiro, wong, perreault, and mccarthy texts. copyright © 2002 mcgraw-hill ryerson...
TRANSCRIPT
For use with Shapiro, Wong, Perreault, and McCarthy texts.Copyright © 2002 McGraw-Hill Ryerson Limited.
Chapter 17: Pricing Objectivesand Policies
For use with Shapiro, Wong, Perreault, and McCarthy texts.Copyright © 2002 McGraw-Hill Ryerson Limited.
Strategic Planning for Price
Pricingobjectives
TargetMarket
PricePromotionPlaceProduct
Geographicterms—
who paystransportation
and how
Discounts andallowances—to whom and
when
Price levelsover product
life cycle
Priceflexibility
17-2
Exhibit 17-1
For use with Shapiro, Wong, Perreault, and McCarthy texts.Copyright © 2002 McGraw-Hill Ryerson Limited.
Pricing Objectives
17-3
Dollar or UnitSales Growth
Growth in Market Share
TargetReturn
MaximizeProfits
MeetingCompetition
NonpriceCompetition
PricingObjectives
SalesOriented
ProfitOriented
Status QuoOriented
Exhibit 17-4
For use with Shapiro, Wong, Perreault, and McCarthy texts.Copyright © 2002 McGraw-Hill Ryerson Limited.
Price Flexibility Policies
One-price policy The same price to all customers who purchase products
under essentially the same conditions and quantitiesExchange rate changes may make this difficult in international
markets
Flexible pricing (e.g., in channels, business markets, expensive consumer shopping products)Issues:
Use is increasing because of impact of information technology, customer databases, scanners, etc.
Selling costs may be higher if prices are negotiated“Signals” to competitors Customer dissatisfaction may be a problem “Gray channels” and cross-shipping
17-4
For use with Shapiro, Wong, Perreault, and McCarthy texts.Copyright © 2002 McGraw-Hill Ryerson Limited.
17-5
Price Level Policies
“Skim the cream” pricing involves selling at a high
price to those who are willing to pay before aiming at
more price-sensitive consumers.
Price
Quantity
Initialskimmingprice
Secondprice
Finalprice
Skimming Pricing
Sell at highprice beforereducing tonext price leveland repeat
For use with Shapiro, Wong, Perreault, and McCarthy texts.Copyright © 2002 McGraw-Hill Ryerson Limited.
Price
Quantity
Penetration Pricing
Wholemarket price
Penetration pricing involves selling the
whole market at one low price.
17-6
Price Level Policies
For use with Shapiro, Wong, Perreault, and McCarthy texts.Copyright © 2002 McGraw-Hill Ryerson Limited.
Trade
Quantity Seasonal
DiscountPricing
Sale Cash
17-7
Discount Pricing
For use with Shapiro, Wong, Perreault, and McCarthy texts.Copyright © 2002 McGraw-Hill Ryerson Limited.
Allowances
Common Kindsof
Allowances
AdvertisingAllowance
Push MoneyAllowance
Trade-InAllowance
StockingAllowance
17-8
For use with Shapiro, Wong, Perreault, and McCarthy texts.Copyright © 2002 McGraw-Hill Ryerson Limited.
Geographic Pricing Policies
Common Geographic
PricingPolicies
F.O.B.
UniformDelivered
FreightAbsorption
Zone
17-9
For use with Shapiro, Wong, Perreault, and McCarthy texts.Copyright © 2002 McGraw-Hill Ryerson Limited.
17-10
Value Pricing
Fits with StrategyPlanning
Fits with StrategyPlanning
Target Market andCompetition
Target Market andCompetition
Focus on CustomerRequirements
Focus on CustomerRequirements????????
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