goals that describe what an organization wants 2 achieve through pricing efforts.
One of the most fundamental pricing objectives
can focus on several dimensions, including maintaining a certain market share, meeting competitors' prices, achieving price stability, or maintaining a favorable public image.
market normally results in charging a high price 2cover the high product quality&, perhaps, the high cost of research& development.
Selection of a Basis for Pricing
three major dimensions on which prices can be based are cost, demand,&competition.
an organization determines price by adding a dollar amount or a percentage 2 the cost of the product.
a method whereby the seller's costs are determined, & then a specified dollar amount or percentage of the cost is added 2 the seller's cost 2 establish the price.
a product's price is derived by adding a predetermined percentage of the cost, called "markup," 2 the cost of the product.
customers pay a higher price when demand 4 the product is strong& a lower price when demand is weak.
pricing primarily influenced by competitors' prices.
Selection of a Pricing Strategy
an approach or a course of action designed to achieve pricing& marketing objectives. help marketers solve the practical problems of establishing prices.
charging different prices 2 different buyers 4 the same quality & quantity of product.
pricing through bargaining between the seller & customer.
setting one price 4 the primary target market & a different price 4 another market.
the temporary reduction of prices on a patterned or systematic basis.
temporarily reducing prices on an unsystematic basis.
a necessary part of formulating a marketing strategy & is one of the most fundamental decisions in the marketing mix.
charging the highest possible price buyers who most desire the product will pay.
is setting the price lower than competing brands 2 penetrate a market & quickly gain a significant market share.
establishing & adjusting prices of multiple products within a product line. A marketer's goal here is 2 maximize profits 4 an entire product line rather than 2 focus on the profitability of an individual product.
involves pricing the basic product in a product line low, but pricing related items that are required 2 operate or enhance it at a higher level.
often used when a product line contains several versions of the same product of different quality. It entails giving higher quality or more versatile products the highest prices.
occurs when a marketer prices an item in the product line low with the intention of selling a higher-priced item in the line.
the organization sets a limited number of prices 4 selected groups or lines of merchandise.
attempts 2 influence a customer's perception of price 2 make the product's price more attractive.
pricing a product at a moderate level & positioning it next 2 a more expensive model or brand.
the packaging together of two or more usually complementary products 2 be sold 4 a single price.
occurs when two or more of the same product are packaged together & sold 4 a single price.
Everyday Low Prices (EDLP)
setting a low price 4 products on a consistent basis, rather than setting high prices & frequently discounting them.
involves ending a price with certain numbers than influence the buyers' perceptions of the price or the product.
certain goods are priced primarily on the basis of tradition.
prices are set at an artificially high level 2 convey a prestigious or quality image.
used by people with great skill or experience in a particular field or activity.
Products priced below the usual markup, near cost, or below cost
advertised sales or price cutting is used 2 increase sales volume & is linked 2 a holiday, season, or special event.
the pricing of a product at a specific level & simultaneously comparing it 2 a higher price.