MKT Final Part 1 (Pricing)
pricing strategy: odd-even pricing
Ending the price with certain numbers to influence buyers' perceptions of the price or product
pricing strategy: bundle pricing
Packaging together two or more complementary products and selling them for a single price
pricing strategy: multiple-unit pricing
Packaging together two or more identical products and selling them for a single price
pricing strategy: single-price
all customers are charged the same price for all the goods and services offered for sale within that product category
Pricing Strategy: reference pricing
positioning a product at lower price and positioning it next to a more expensive model or brand. - selling against the brand
inelastic (price insensitive)
price change causes little change in demand price increase = increase revenue
pricing strategy: leader pricing
Also known as loss leader pricing, products priced below the usual markup, near cost, or below cost
Pricing Strategy: everyday low prices
- consistent low prices
select a basis for pricing
- cost (Mark up and breakeven) - demand (Flexible/variable: off peak, different prices) - competition - new product
Developing Pricing Objectives
- profit - status quo - market share
Internal Factors of price
1. Marketing Objectives 2. Marketing Mix Strategy 3. Costs
External factors of price
1. demand for your product 2. competition 3. economy
pricing strategy: captive-product pricing
Captive products are items designed specifically for use with another product examples: razor and shaving creme
New Product Pricing Strategies (Market penetration)
Good value = lower price, higher quality Economic Strategy = Lower price, Lower quality
pricing strategy: bait pricing
Illegal practice of advertising unrealistically low prices to bring customers into the store
New Product Pricing Strategies (Market Skimming)
Premium = higher price, higher quality overcharging = higher price, lower quality
Pricing Strategy: portfolio pricing
different levels of price points across a product category where customers are willing to pay more for extras
Elastic (price sensitive)
price change causes great change in demand - Price increase = decrease revenue
