Basic Pricing Concepts

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29 Νοε 2013 (πριν από 3 χρόνια και 6 μήνες)

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1


Chapter 26
.1

Basic Pricing Concepts

Objective



Name

three pricing policies used to establish a base price.



Explain

two popular pricing strategies for introducing a new product.



Explain

the relationship between pricing and the product life cycle.


Main
Idea

It is important to establish a base price from which price adjustments can be made. Various situations and
company policies can affect the pricing of a product.

Basic Pricing Concepts

Three Strategies Used for Setting Base Prices






Attempt to





Relies on







Price




Price





Price




Resellers





Used


Markup
-

The difference
_______________ an

______________ ___________ and sale ____________.


Calculating the Wholesale Price

Manufacturer’s suggested retail price (M )

Retailer’s Markup (40% of )

Wholesaler’s price to retailer (subtract

)

Wholesaler’s markup (20% of )

Manufacturer’s price to wholesaler * (subtract wholesaler’s


)


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1.

3.

2.

2


Calculating the Retail Price

Cost of
Producing the item

Manufacturer’s expenses and intended profit (20% of )

Manufacturer’s price to wholesaler (Cost


)

Wholesaler’s markup (25% of price )

Wholesaler’s price to
retailer (Price to )

Retailer’s markup (66.67% based )

Retailer’s base price to consumer


Pricing Policies and Product Life Cycl
e

One
-
Price Versus Flexible
-
Price Policy

O
ne
-
price policy
-
A
____________

in which all
_________________

are
____________

the same
___________
.

F
lexible
-
price policy
-
A
_____________

in which

________________

_________

_______________

prices for
the
____________

type or amount of
____________________
.


Product Life Cycle



The goal of
marketers is to keep

Price is

Price is

3



S
k
imming P
ricing

A
_______________ ____________

that sets a very
____________

____________

for a
_________
product.

Penetration P
ricing

______________

the
__________

for a new product very
_________
to
_______________

as many as possible
to
__________

the
_______________
.

Pricing During the Product Stages



Pricing during ________________ periods in a
_______________ life ____________ is determined by
which _____________ ________________ was _________________ used

________________ or
_________________.



Sales of ________________ introduced with __________________ ________________ must be
__________________. Once sales ______________ to level __________, the _____________ should
be ________________ for the ______________
-
_________________ target _________
_____.



Very _____________ price _____________ will be made in the _______________ ______________ for
_______________ introduced with __________________ ________________.

Graphic Organizer:

Notes About the Pricing Policies That Can Affect the Base Price o
f a Product




4


Chapter 26
.2

Basic Pricing Concepts


Objectives



Describe

pricing strategies that adjust the base price.



List

the steps involved in determining a price.



Explain

the use of technology in the pricing function.

Main Idea

Price adjustments allow businesses to stay competitive. The right pricing strategy can help increase sales and
profitability.

Adjusting the Base Price

Graphic Organizer: Strategies for Adjusting Prices and Steps in Setting Prices

Price Adjustment Strateg
ies

Six Steps in Determining Price

1.

Product Mix Strategies


1.



2.



3.



4.



5.


6.



1.

Product Mix Pricing Strategies

Adjusting
_______________

to
________________

the
________________

for a
_____________

of products
rather than for just
___________

item.

a.

Price Lining
-
A pricing __________________ that __________ a _________________ number of
____________ for specific _____________ or ____________ of ____________________.

B.

Optional Product
-

______________ involves ___________ prices for _________________ or
______________ sold with the main ________________.

5


C.

Captive Product
__________________ sets the ______________ for one ________________
_________ but makes up for it by _______________
_ the _______________ needed to use that
________________ __________.

D.

By
-
Product
_______________ helps _________________ get rid of _____________ materials used in
making a _______________ by using ___________ _______________.

E.

Bundle P
ricing
-
Pricin
g
___________________

in which a company offers
______________

___________________
, or
__________________
,
_______________

in a
________________

that is
sold at a
_____________

price.


2.

Geographical Pricing

Price
____________________

required because of d
____________________

shipping
___________________
.

With FOB (Free on Board)
________________

_______________
, the
______________

___________

for the
_________________

and assumes
___________________

for the shipment until it reaches the
____________
.


3.

International Pricing

When doing business internationally, marketers need to set prices that take into consideration:

Costs



C



L



R



E



M



S



D


4.

Segmented Pricing Strategies
-
helps businesses optimize profits and compete
effectively.

A
__________________

that uses
_________

or
____________

________________

prices for a
_______________
, though there is no
_________________

in the item’s
___________
.


6






5.

Psychological Pricing Strategies

Pricing
________________

that
_______________

an
_________________

for customers.

























Recognizing a _____________
____________ to
price

Demand for a ____________ ___________ is
the cause of the _______________ in price.

Pricing _____________ to where a __________
is _____________ and the location of the good.

During __________ ____________, they are
able to ____________ more bec
ause of
increased _____________.

Odd
-
Even Pricing

Prestige Pricing

Multiple
-
Unit Pricing

Everyday Low
Prices

Psychological Pricing
Strategies Goal

7



6.

Promotional Pricing
-

Used in
________________

with
_____________

__________________

when
________________

are
_________________
for a
____________

period of time.


Common

types of promotional pricing are
loss
leader pricing
,
special
-
event pricing
, and
rebates and
coupons
.


Loss Leader Pricing
-
is used to _______________ store ___________ by offering very
_______________ items of merchandise for ___________ at ____________
-
__________ prices.


Special
-
Event Pricin
g
-
items are _________________ in __________ for a __________ period of
_____________, based on a ______________ ____________.


Rebates and Coupons
-
Rebates are ______________ refunds provided by the ___________________ to
__________________.


Coupons
allow ________________ to take __________________ at the ____________ of __________________.


7.

Discounts and Allowances
-
involves the ________________ offering __________________ from the
usual ____________.





8



The Pricing Process and Related Technology





Pricing Technology



















Decisions are based
on






Electronic gadgets and




Radio frequency
identification (RFID)