Pricing by Maria Peer

Role of Pricing  Produces revenue  Product, place and promotion produce costs © Maria Peer 2

Procedure 1. Pricing objective (profit, market share, skimming, quality) 2. Demand curve – quantities at each possible price 3. Costs varying according to output level 4. Competitors‘ costs, prices and offers 5. Pricing method 6. Final price based on psychological pricing, other marketing mix elements, impact of price Mag. Maria Peer 3

Price strategies  Geographical pricing  Price discounts and allowances  Promotional pricing  Discriminatory pricing  Product-mix pricing Mag. Maria Peer 4

Price changes  Decrease – caused by  excess capacity  Decline in market share  Lower costs  Economic recession  Increase – caused by  Over demand  Inflation Mag. Maria Peer 5

Alternatives to increasing prices  Shrinking amount of products  Substituting less expensive materials  Removing product features Mag. Maria Peer 6

Dealing with competitor attacks  Market leaders might  maintain price  Raise quality  Reduce price  Launch a low-price fighter line Mag. Maria Peer 7

Literature  Kotler, Philip (2000). Marketing Management. Prentice-Hall. New Jersey Mag. Maria Peer 8