Pricingby Maria Peer

© Maria Peer

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Role of Pricing Produces revenue Product, place and promotion produce

costs

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Procedure 1. Pricing objective (profit, market share,

skimming, quality)2. Demand curve – quantities at each possible

price3. Costs varying according to output level4. Competitors‘ costs, prices and offers5. Pricing method6. Final price based on psychological pricing,

other marketing mix elements, impact of price

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Price strategies Geographical pricing Price discounts and allowances Promotional pricing Discriminatory pricing Product-mix pricing

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Price changes Decrease – caused by

excess capacity Decline in market share Lower costs Economic recession

Increase – caused by Over demand Inflation

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Alternatives to increasing prices Shrinking amount of products Substituting less expensive materials Removing product features

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Dealing with competitor attacks Market leaders might

maintain price Raise quality Reduce price Launch a low-price fighter line

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Literature Kotler, Philip (2000). Marketing

Management. Prentice-Hall. New Jersey