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10 [compatibility mode]
1.
Chapter 10- slide
1 Chapter Ten Pricing: Understanding and Capturing Customer Value
2.
Price is the
amount of money charged for a product or service. It is the sum of all the values that consumers give up in order to gain the benefits of having or using a product or service. What Is a Price? Chapter 10- slide 2Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall order to gain the benefits of having or using a product or service. Price is the only element in the marketing mix that produces revenue; all other elements represent costs
3.
Factors to Consider
When Setting Prices Customer Perceptions of Value Chapter 10- slide 3Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
4.
Factors to Consider
When Setting Prices • Customer perceptions of value set the upper limit for prices, and costs set Other Internal and External Considerations Affecting Price Decisions Chapter 10- slide 4Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall upper limit for prices, and costs set the lower limit • Companies must consider internal and external factors when setting prices
5.
Factors to Consider
When Setting Prices Pure competition Other Internal and External Consideration Affecting Price Decisions Competition Chapter 10- slide 5Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Monopolistic competition Oligopolistic competition Pure monopoly
6.
Factors to Consider
When Setting Prices • Comparison of offering in terms of customer value Other Internal and External Considerations Competitor's Strategies Chapter 10- slide 6Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall terms of customer value • Strength of competitors • Competition pricing strategies • Customer price sensitivity
7.
General Pricing Approaches •
Value-Based Pricing • Cost-Based Pricing • Competition-Based Pricing Chapter 10- slide 7Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall • Competition-Based Pricing
8.
Factors to Consider
When Setting Prices Value-based pricing uses the buyers’ perceptions of value, not the sellers’ cost, as the key to pricing. Price is considered Customer Perceptions of Value Chapter 10- slide 8Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall perceptions of value, not the sellers’ cost, as the key to pricing. Price is considered before the marketing program is set. • Value-based pricing is customer driven • Cost-based pricing is product driven
9.
Factors to Consider
When Setting Prices Customer Perceptions of Value Chapter 10- slide 9Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
10.
Factors to Consider
When Setting Prices Value-based pricing Customer Perceptions of Value Chapter 10- slide 10Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Good-value pricing Value-added pricing
11.
Factors to Consider
When Setting Prices Good-value pricing offers the right combination of quality and good service at Customer Perceptions of Value Chapter 10- slide 11Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall combination of quality and good service at a fair price Existing brands are being redesigned to offer more quality for a given price or the same quality for a lower price
12.
Factors to Consider
When Setting Prices Everyday low pricing (EDLP) involves charging a constant everyday low price with few or no temporary price discounts Customer Perceptions of Value Chapter 10- slide 12Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall with few or no temporary price discounts High-low pricing involves charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items
13.
Factors to Consider When
Setting Prices Cost-based pricing involves setting prices based on the costs for producing, Company and Product Costs Chapter 10- slide 13Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall based on the costs for producing, distributing, and selling the product plus a fair rate of return for its effort and risk
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