1. Pricing
You don’t sell through price. You sell the price.

2. Synonyms for Price Rent Special assessment Tuition Bribe Fee Dues Fare
Rate
Toll
Premium
Honorarium
Special assessment
Bribe
Dues
Salary
Commission
Wage
Tax

3. Common Pricing Mistakes
Determine costs and take traditional industry margins
Failure to revise price to capitalize on market changes
Setting price independently of the rest of the marketing mix
Failure to vary price by product item, market segment, distribution channels, and purchase occasion

4. Differentiated Pricing
Customer-segment pricing
Product-form pricing
Image pricing
Channel pricing
Location pricing
Time pricing
Yield pricing

5. Setting Pricing Policy
1. Selecting the pricing
objective
2. Determining demand
3. Estimating costs
4. Analyzing competitors’
costs, prices, and offers
5. Selecting a pricing
method
6. Selecting final price

6. Sum of the Fixed and Variable Costs for a Given
Types of Costs
Fixed Costs
(Overhead)
Costs that don’t
vary with sales or
production levels.
Executive Salaries
Rent
Variable Costs
Costs that do vary
directly with the
level of production.
Raw materials
Total Costs
Sum of the Fixed and Variable Costs for a Given
Level of Production

7. Some important pricing definitions
Utility: The attribute that makes it capable of want satisfaction
Value: The worth in terms of other products
Price: The monetary medium of exchange.
Value Example: Caterpillar Tractor is $100,000 vs. Market $90,000 $90,000 if equal 7,000 extra durable 6,000 reliability 5,000 service 2,000 warranty $110,000 in benefits - $10,000 discount!

8. Predatory pricing: Selling below cost with the intention of punishing a competitor or gaining higher long-term profits by putting competitors out of business

9. 11/1/15
Name the Pricing Strategy

10. Government Regulations Affecting Price
Federal and state governments have enacted laws regarding:
price fixing
price discrimination
resale price maintenance
minimum pricing
unit pricing
price advertising

11. Government Regulations Affecting Price
Price fixing occurs when competitors agree on certain price ranges within which they set their own prices.
Price discrimination occurs when a firm charges different prices to similar customers in similar situations.

12. Government Regulations Affecting Price
Resale price maintenance occurs when a manufacturer forces retailers to sell an item at a minimum price.
Minimum price laws prevent retailers from selling goods below cost plus a percentage for expenses and profit. Some states do not have minimum price laws and allow loss leaders, items sold at cost to attract customers.

13. Government Regulations Affecting Price
Unit pricing allows consumers to compare prices in relation to a standard unit or measure, such as an ounce or a pound.
The Federal Trade Commission (FTC) price advertising guidelines forbid fraudulent and misleading pricing advertisements.

14. Pricing Strategies Pricing Strategies
Captive product pricing involves products that must be used along with the main product
Optional product pricing takes into account optional or accessory products along with the main product
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