1. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ © 2001 South-Western College Publishing 1 CHAPTER FIFTEEN PRICING CONCEPTS $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ Prepared by Jack Gifford Miami University (Ohio)

2. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ © 2001 South-Western College Publishing 2 IMPORTANCE OF PRICING $ To the consumer… $ The cost of something $ In the broadest sense, price allocates resources in a free- market economy $ To the marketer… $ Price is revenue, source of profit

3. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ © 2001 South-Western College Publishing 3 WHAT IS A PRICE? $ Is that which is given up in an exchange to acquire a good or service $ Can relate to anything with perceived value $ Facilitates the exchange process $ Is the medium of exchange $ An agreed upon abstraction based upon supply and demand and value assessment $ Has many names: $ Revenue $ Rent $ Fee $ Donation $ Toll $ Honorarium $ Tuition

4. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ © 2001 South-Western College Publishing 4 IMPORTANCE OF PRICE TO MARKETING MANAGERS $ Revenue is the price charged to customers multiplied by the number of units sold $ Revenue is what pays for every activity of a company $ Profit is what’s left over after paying for all these activities $ Marketers must select a price that is not too high or not too low, a price that equals the perceived value to target consumers

5. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ © 2001 South-Western College Publishing 5 PRICING OBJECTIVES $ Profit-oriented pricing objectives $ Sales-oriented pricing objectives $ Status quo pricing objectives 1. PROFIT MAXIMIZATION Setting prices so that total revenue is as large as possible relative to total costs Competitive environment? Highest price possible given consumers perceived value of the product

6. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ © 2001 South-Western College Publishing 6 PRICING OBJECTIVES $ Profit-oriented pricing objectives $ Sales-oriented pricing objectives $ Status quo pricing objectives 2. SATISFACTORY PROFITS Setting prices so that profits to stakeholders are satisfactory What is satisfactory depends upon levels of risk and management objectives

7. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ © 2001 South-Western College Publishing 7 PRICING OBJECTIVES $ Profit-oriented pricing objectives $ Sales-oriented pricing objectives $ Status quo pricing objectives 3. TARGET RETURN ON INVESTMENT (ROI) ROI = NPat / TA If you think of your savings account, it is the interest you earn on your money; the more the better A “good” ROI depends upon the level of risk, industry benchmarks, and available alternatives

8. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ © 2001 South-Western College Publishing 8 PRICING OBJECTIVES $ Profit-oriented pricing objectives $ Sales-oriented pricing objectives $ Status quo pricing objectives 1. Market share: A percentage of sales for that industry A Sales can be reported in either dollars or units B Profitability and high market share are often highly correlated..but not always 2. Sales Maximization

9. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ © 2001 South-Western College Publishing 9 PRICING OBJECTIVES $ Profit-oriented pricing objectives $ Sales-oriented pricing objectives $ Status quo pricing objectives 1. Seeks to maintain existing prices or meet the competition’s prices A Price leadership B Minimizes price wars

10. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ © 2001 South-Western College Publishing 10 PRICE IN THE ECONOMY $ The Demand Curve: $ Demand is the quantity of a product consumers are willing and able to buy at a given price. Normally, the higher the price, the lower the demand. $ As prices drop, consumers will be willing to purchase more of an item $ The slope of the demand line depends upon the sensitivity of demand to prices Quantity Price Demand 2$ 1$ One unit Two units

11. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ © 2001 South-Western College Publishing 11 ELASTICITY OF DEMAND $ Price elasticity measures the percentage change in quantity demanded by a percentage change in price. $ Elastic $ Inelastic $ Unitary elasticity % CHANGE IN QUANTITY DEMANDED OF GOOD “A” % CHANGE IN PRICE OF GOOD “A” E =

12. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ © 2001 South-Western College Publishing 12 ELASTICITY OF DEMAND: INELASTIC $ Relatively Inelastic Quantity Price Demand A relatively large increase in price results in only a small decrease in quantity demanded. E is less than 1.0

13. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ © 2001 South-Western College Publishing 13 ELASTICITY OF DEMAND: ELASTIC $ Relatively Elastic Quantity Price Demand A relatively small decrease in price results in a substantial increase in quantity demanded. E is greater than 1.0

14. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ © 2001 South-Western College Publishing 14 FACTORS THAT AFFECT ELASTICITY $ Availability of substitutes $ Price relative to purchasing power $ Product durability $ A product’s other uses

15. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ © 2001 South-Western College Publishing 15 THE COST DETERMINANT OF PRICE $ All costs are Fixed, Variable, or a combination of fixed and variable $ The costs and revenues associated with the production of “one more unit” of a product are called marginal costs and marginal revenues $ An analysis of these and other costs help marketers determine alternative pricing strategies

16. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ © 2001 South-Western College Publishing 16 ALTERNATIVE METHODS OF COST BASED PRICING $ Markup pricing $ Formula pricing (keystoning) $ Profit maximization pricing $ Break-even pricing $ Target-return pricing

17. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ © 2001 South-Western College Publishing 17 OTHER DETERMINANTS OF PRICE 1 Stage in the product life cycle $ Introductory $ Growth $ Maturity $ Decline $ High or low pricing $ Prices begin to stabilize and drop $ Prices drop dramatically $ Lowest prices; little if any profits; prices may be below costs

18. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ © 2001 South-Western College Publishing 18 OTHER DETERMINANTS OF PRICE 1 The competition 2 Distribution strategy 3 Promotion strategy 4 The relationship of price to quality 5 Demands of larger customers 6 Global environmental influences

19. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ © 2001 South-Western College Publishing 19 HOW TO SET A PRICE ON A PRODUCT $ Setting the right price on a product is a four-step process: $ Establish pricing goals $ Estimate demand, costs, and profits $ Choose a price strategy to help determine a base price $ Fine tune the base price with pricing tactics

20. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ © 2001 South-Western College Publishing 20 SETTING A PRICE ON A PRODUCT: Establishing pricing goals $ Select profit-oriented, sales-oriented, or status quo, as discussed in the prior chapter $ Must study the competition to determine reasonableness of pricing goals $ Determine market share necessary to achieve desired pricing goals $ All pricing goals have trade-offs

21. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ © 2001 South-Western College Publishing 21 SETTING A PRICE ON A PRODUCT: Estimate demand, costs, and profits $ Revenue is a function of price and quantity demanded $ Quantity demanded depends upon elasticity $ Therefore, marketers must estimate the profit that can be generated at various prices, given demand, elasticity and costs. $1.35 ? $1.49 ?

22. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ © 2001 South-Western College Publishing 22 SETTING A PRICE ON A PRODUCT: Choose a price strategy $ The basic, long-term pricing framework for a good or service should be a logical extension of the pricing objectives. $ Must determine initial price and price points over time as the product moves through the product life cycle $ Must be set to provide a perceived value for a defined target market

23. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ © 2001 South-Western College Publishing 23 SETTING A PRICE ON A PRODUCT: Choose a price strategy $ Three basic strategies include… $ Price skimming $ Penetration pricing $ Status quo pricing $ Price higher than those of competitors $ Used when a product or service has a unique advantage $ Used when demand exceeds supply in the short run $ May take advantage of legal protection against competition (patents) $ To create a prestige image

24. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ © 2001 South-Western College Publishing 24 SETTING A PRICE ON A PRODUCT: Choose a price strategy $ The basic, long-term pricing framework for a good or service should be a logical extension of the pricing objectives. $ Must determine initial price and price points over time as the product moves through the product life cycle $ Must be set to provide a perceived value for a defined target market

25. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ © 2001 South-Western College Publishing 25 SETTING A PRICE ON A PRODUCT: Choose a price strategy $ Three basic strategies include… $ Price skimming $ Penetration pricing $ Status quo pricing $ Set price lower than competition $ A means to reach the mass market $ Designed to capture a large market share $ Lower prices usually mean higher break-even-points $ Effective in a price-sensitive market Southwest Airlines strategy

26. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ © 2001 South-Western College Publishing 26 THE LEGALITY AND ETHICS OF PRICE STRATEGY $ Some price decisions are subject to government regulation designed to stimulate full disclosure, prevent monopolies, and stimulate the free market enterprise system

27. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ © 2001 South-Western College Publishing 27 THE LEGALITY AND ETHICS OF PRICE STRATEGY $ Unfair Trade Practices $ Exist in about 1/2 of the states in the USA $ Selling below cost is illegal $ Wholesalers and retailers must have a minimum markup of ….. (depends upon state) $ Designed to protect small competitors

28. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ © 2001 South-Western College Publishing 28 THE LEGALITY AND ETHICS OF PRICE STRATEGY $ Price fixing $ An agreement between two or more firms on the price they will charge for a product or service. $ Illegal under the Sherman Act and the Federal Trade Commission Act $ Can result in both fines and jail sentences! If we both charge $40 per dozen units and share the market 50/50, we will both come out ahead.

29. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ © 2001 South-Western College Publishing 29 THE LEGALITY AND ETHICS OF PRICE STRATEGY $ Price discrimination $ Sellers must offer substantially identical goods to different parties for the same price and terms if the situations are materially the same $ Only relates to interstate trade $ Must be carried out in a short period of time $ Products must be of like grade and and quality $ The charging of different prices must result in a significant competitive injury $ COMMON DEFENSES BY SELLERS INCLUDE...

30. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ © 2001 South-Western College Publishing 30 THE LEGALITY AND ETHICS OF PRICE STRATEGY $ A seller MAY charge different prices even in the above named situations IF… $ The price differential is justified by different manufacturing costs or quantity discount savings $ In good faith to meet changing market conditions $ To meet the prices of competition These exceptions provide lots of “weasel room” for marketers!

31. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ © 2001 South-Western College Publishing 31 THE LEGALITY AND ETHICS OF PRICE STRATEGY $ Predatory pricing $ Is the practice of charging a very low price for a product with the INTENT of driving competitors out of business or out of a market $ Illegal under the Federal Trade Commission Act $ Must prove both intent and sale below average cost to prosecute

32. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ © 2001 South-Western College Publishing 32 TACTICS FOR FINE TUNING THE BASE PRICE $ Discounts, Allowances, Rebates and Value Pricing $ Quantity discounts $ Cash discounts $ Functional discounts $ Seasonal discounts $ Promotional discounts $ Rebates $ Value based pricing (trade loading) Price = X -QD -CD -FD ------------- Net price

33. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ © 2001 South-Western College Publishing 33 TACTICS FOR FINE TUNING THE BASE PRICE $ Geographic pricing $ FOB, origin pricing $ Uniform delivered pricing $ Zone pricing $ Freight absorption pricing $ Basing-point pricing

34. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ © 2001 South-Western College Publishing 34 TACTICS FOR FINE TUNING THE BASE PRICE $ Special pricing tactics $ Single-price tactic $ Flexible or variable pricing (cars) $ Professional services pricing $ Price lining $ Leader or loss leader pricing $ Odd-even pricing $ Price bundling $ Two-part pricing For you the price is $19.95