This is a presentation based on the text book 'Marketing Management' by Philip Kotler. It describes about developing pricing strategies and programs.

1. How do consumers process and
evaluate prices??

2. What is Price?
An element of marketing mix that
produces revenue

3. Consumer Psychology
Key in understanding consumer's way of
processing and evaluating price

4. Processing price information
• Prior purchasing experience
• Formal communications
• Informal communications
• Price variations
• Point-of-purchase
• Online resources

5. Set of blue denims
₹499/unit
Cheap
Fashion
₹2499/unit
Craftsmanship
Lifestyle
₹10499/unit
Exclusivity
Status
Street Levis Armani

6. Reference Prices
Often employed by consumers while
choosing products

7. Possible Reference Prices
• Fair price
• Typical price
• Last price paid
• Upper and Lower bound price
• Competitor prices
• Usual discount price
• Expected future price

8. Price-Quality Inference

9. Lower price instincts cheap quality

11. Price endings

12. Customers process the prices left-to-right
rather than by rounding

13. Number psychology
• Ending with 9 suggests a discount or
bargain
• Prices ending with 0 and 5 are also
popular
• 9 influences customers with poor price
knowledge

14. Recap-Customer psychology
• Reference prices
• Price-Quality inferences
• Price endings

15. References and Credits
• Marketing management – Philip Kotler
• https://support.content.office.net/en-
us/media/07ec15ce-0c1d-4089-a5b6-
d106f7b0c7d1.gif
• http://www.astrogle.com/images/2014/09/number-
97.jpg
• http://blog.timesunion.com/momsatwork/files/2013/
11/blue_jeans1.jpg
• https://www.flickr.com/search/?text=left%20to%20r
ight
• http://www.h3dwallpapers.com/wp-
content/uploads/2014/09/Spicejet_logo-4.jpg

16. Disclaimer
Created by Mohith Reddy, IIT Madras
during an internship by Prof. Sameer
Mathur, IIM Lucknow.
www.IIMInternship.com