Marketing 3343 Six Steps In Pricing Strategy Process

The Six Steps in Pricing Strategy Process

1) Identify Pricing Objectives & Constraints 2) Estimate Demand & Revenue 3) Determine Cost, Volume, & Profit Relationships 4) Select an Approximate Price Level 5) Set List or Quoted Price 6) Make Special Adjustments to list or quoted price

Third Step

Determine Cost, Volume, & Profit Relationships

Estimate Demand & Revenue

Determining how much demand there will be for the product, also the estimated amount of revenue that will be generated.

Make Special Adjustments to List or Quoted Price

Discounts, Allowances, Geographical Adjustments

Second Step

Estimate Demand & Revenue

Determine Cost, Volume, and Profit Relationships

Figuring out what the firms fixed costs, variable costs, and quantities producted.

First Step

Identify Pricing Objectives & Constraints

Sixth Step

Make Special Adjustments to list or Quoted Price

Set List or Quoted Price

One Price or flexible price. Company, customer, and competitive effects. Incremental Costs & Revenue

Fourth Step

Select an Approximate Price Level

Fifth Step

Set List or Quoted Price

Identify Pricing Objectives & Constraints

Specifying the role of price in an organization's marketing and strategic plans. Long term, short term ect. Constraints are factors that limit the range of prices a firm can set.

Select an Approximate Price Level

Using the Demand, Cost, Profit, or Competition oriented approaches to determine price.