JEWELLARENAV50CH14TOPTENCONCEPTS

1. Developing Pricing Strategies and Programs Jewell A. Arena Ateneo Graduate School of Business Top 10 Concepts April 2010

2. Ten Concepts Pricing strategies requires setting , adapting and changing prices. Six steps procedure insetting up the prices are selecting the pricing objective, determining demand, estimating costs, analyzing competitor’s costs, prices, and offers and selecting a pricing method and selecting the final price. Five major objectives as to the company decides where it wants to position its market offering are survival, maximum current profit, maximum market share, maximum market skimming, product-quality leadership and other objectives. Demand set the ceiling for the price. Marketers should consider price sensitivity, estimating demand curves and the price elasticity of demand. Price of goods or services equals to cost of producing, distributing and selling and fair return for its effort and risk.

3. Ten Concepts 6. In analyzing competitors’ costs, prices and offers we have to look into their geographical pricing, discounts and allowances, promotional pricing and differentiated pricing. 7. The seller charges different amounts to different classes of buyers like customer-segment pricing, product-form pricing, image pricing, channel pricing, location pricing and time pricing. 8. Six pricing method are mark-up pricing, target-return pricing, perceived-value pricing, value pricing, going-rate pricing, and auction-type pricing. 9. Factors that affect final price are impact of other marketing activities, company pricing policies, gain-and-risk sharing pricing, and the impact of price on other parties. 10. Companies should initiate price cuts, price increases and respond to competitor’s price changes.

4. Setting the Selecting the Pricing Objective Product Quality Leadership Survival Max. Market Share Max. Market Skimming Max. Current Profit Other Objectives Price Elasticity of Demand Demand Curves Demand Price Sensitivity

5. Estimating Costs Competitor’s Price Changes I have to deliver this Product to a Customer with an Image thru this Channel in this location at this time. Fixed Costs Variable Costs Variable Costs S P Company policy = Gains&Risk R D JALIEN Auction Analyzing Competitor’s Costs, Prices and Offers P Other Parties Mark-up Pricing Target Pricing G Value Selecting Pricing Method Activity-Based Costs Brand Selecting Final Price

6. Developing Pricing Strategies and Programs Jewell A. Arena Ateneo Graduate School of Business Top 10 Concepts April 2010