The amount of money needed to persuade someone to do something.

1. By: Imad Feneir

2. Overview
# Definition of price.
# Importance of Price.
# Pricing objectives.
# Factors Affecting Pricing.
# Pricing strategies (Methods ).
# Articles about pricing.
# Samsung versus Apple.
# Conclusion

3. Definition of price
* The amount of money charged for
a product or service.
* The sum of all the values that
consumers exchange for the benefits
of having or using the product or
service.

4. Definition of price
* A value that will purchase a
limited quantity, weight, or other
measure of a good or service.
* The amount of money needed to
persuade someone to do something.

5. Importance of Price
* Choosing the right pricing strategy
strengthens the chance of achieving
turnover and profit in line with
company objectives.

6. Importance of Price
* Often price creates a first impression
of the quality of the product/service and
other value based judgements come
later.

7. Importance of Price
* Controls in size of demand.

8. Pricing objectives
*Partial cost recovery: A company that
has sources of income other than from
the sale of products may decide to
implement this pricing objective.
*Profit margin maximization: The
company want to maximize the per-unit
profit margin of a product.

9. Pricing objectives
*Revenue maximization: The company
want to maximize revenue from the sale
of products.
*Quantity maximization: Want to
maximize the number of items sold.

10. Pricing objectives
*Status quo: Want to keep your
product prices in line with the same or
similar products offered by your
competitors .
*Survival: Needs to price at a level
that will just allow it to stay in business
and cover essential costs.

11. Factors Affecting Pricing
(i) Internal Factors:
1. Cost: The firm should consider the cost
involved in producing the product.
2. The predetermined objectives: the
marketer should consider the objectives of the
firm.

12. Factors Affecting Pricing
3. Image of the firm: The price of the
product may also be determined on the basis
of the image of the firm in the market.
4. Product life cycle: The stage at which the
product is in its life cycle in the market.

13. Factors Affecting Pricing
5. Credit period offered: Longer the credit
period, higher the price and shorter the credit
period, lower the price of the product.
6. Promotional activity: If the firm incurs
heavy advertising and sales promotion costs,
the pricing of the product should cover the
cost.

14. Factors Affecting Pricing
(ii) External Factors:
1. Competition: the firm needs to study the
degree of competition in the market.
2. Consumers: The marketer should consider
various consumer factors (the price sensitivity
of the buyer, purchasing power, and so on).

15. Factors Affecting Pricing
3. Government control: Government rules
and regulation must be considered while
fixing the prices.
4. Channel intermediaries: The marketer
must consider a number of channel
intermediaries and their expectations.

16. Factors Affecting Pricing
5. Economic conditions: The marketer
may also have to consider the economic
condition prevailing in the market while fixing
the prices.

17. Pricing strategies (Methods )
# Competitive pricing: Pricing your
product(s) based on the prices your
competitors have on the same product(s).
# Penetration pricing: Used to gain entry
into a new market and to get market share.

18. Pricing strategies (Methods )
#Premium pricing: Employed when the
product you are selling is unique and of very
high quality.
#Skim pricing: Used on products that are
new and have few, direct competitors when
first entering the market.

19. Pricing strategies (Methods )
#Product bundle pricing: Used to group
several items together for sale.
#Cost based pricing: To calculate product
cost you need to include the costs of
production, promotion and distribution and
add the profit level you want.

20. Pricing strategies (Methods )
#Customer based pricing: Business owners
should be know "at which price make their
customers thinks their product offers good
value”?
#Psychological Pricing: used to play on
consumer perceptions.

21. Articles about pricing
* A Review of the Effect of Pricing Strategies
on the Purchase of Consumer Goods
Dudu, O.F. and Agwu, M. E. (2014)
Purpose: This study examined the effect of pricing
strategies on the purchase of consumer goods.
Methodology: The research intended through
review of the literature to answer questions on the
extent to which competitor's price affects purchase
of products and how customers perceive the value-
based pricing concept of firms.

22. Findings:
1- Price is the most flexible element in
marketing strategy.
2- The pricing strategy used for a product says a
lot about the product affects on the purchase
decision process of the consumer.
3- Most organizations, use more than one
pricing strategy which makes it is even more
flexible.
4- Price is important to both the buyer and
seller.

23. * Optimal Uniform Pricing Strategy of a
Service Firm When Facing Two Classes of
Customers.
Wenhui Z., Xiuli C. and Xiting G. (2014).
Purpose: This study addresses the optimal
uniform pricing problem of a service firm using a
queuing system with two classes of customers.
Methodology: They consider a firm that
provides a service to a market. There are two
classes of potential customer. Different system
parameters can lead to completely different
pricing strategy for the firm.

24. Findings:
1- The potential pool of customers plays a central
role in the firm’s optimal decision.
2- The firm cannot or is not allowed to set
discriminatory prices.
3- The potential market structure plays a key role
for the firm.
4- The firm has to be fully investigated and
understood before the firm makes the pricing
decision.
5- the optimal selling price of a firm is not always
monotone in the potential market size or the
arrival rates of potential customers.

25. * Pricing strategies with reference effects
in competitive industries.
Brian C. and Srini K. (2014)
Purpose: This paper examines the effect of
reference prices on companies operating
within competitive industries.
Methodology: This paper considers the
optimal pricing strategy for firms in
competitive industries subject to reference
price effects and the advent of competition
leaves pricing strategies qualitatively
unchanged.

26. Findings:
1- Firms that use comparative data to
evaluate pricing managers’ achievements
may reach to incorrect conclusions.
2- Companies that price optimally to
utilize reference prices may earn
disproportionately “small” rewards for
their actions.
3- More long-term focused firms may
generate “lower” profit than their
competition.

28. Samsung versus Apple
# Apple :
- Premium and Skimming pricing strategy.
- Primary objective, sell a great phone
and provide a great experience.
- Offer a small number of products.
- Give priority to profits over market
share.
- Create a halo effect that makes people
starve for new Apple product.

29. Samsung versus Apple
# Samsung :
- Skimming strategy for the main
product (Galaxy S) to gain the upper
hand over their competitors.
- Competitive strategy when other
competitors launch a smartphone.
- Penetration strategy for other
products from smartphones.
- Permanent diversity of products to
control the market.

30. conclusion
- To choosing a pricing objective and a related
strategy requires you to carefully consider your
business and financial goals.
- You want to select objectives and strategies
that will position your product and business for
success.
- You can to change your objectives and employ
different strategies in the future as your
business grows or changes.