PMPM HE JIANYE
PMPM HE JIANYE
1. Pricing approaches and strategies
i. Cost – based pricing
This approach can be based on cost – plus basis which adds a standard make – up to cost of the product or break – even basis which is to set price to break – even on the cost of making and marketing products or to make the target profit. ii. Product – bundle pricing
This involves combining several products and offering the bundle at a reduced price. iii. Market – skimming pricing
This involves setting a high price for a new product to skim maximum revenue from the segments willing to pay the high price. The product’s quality and image support its higher price and enough buyers want the product at that price; competitors cannot enter the market and undercut the high price. iv. Optional – product pricing
This involves the pricing of optional or accessory products along with a main product.
v. Market – penetration pricing
This means setting a low price for a new product in order to attract a large number of buyers and a large market share. Approaches: the market is price – sensitive so that a low price produces more market growth; the low price must help keep out competition, and the price must maintain its low – price position. vi. Incremental cost
Incremental cost is the cost associated with increasing production by one unit. Because some costs are fixed and other variable, the incremental cost will not be the same as the overall average cost per unit. vii. Captive – product pricing
This involves setting a price for products that must be used along with a main product. Producers of the main product offer them at low prices and set high make – ups on the suppliers.
2. Name the four stages in the PLC
Introduction stage strategies
Markets spend heavily on promotions to inform the target market about the new product’s benefits. Low or negative profits may encourage the company to price the product high to help offset expenses.
1. Pricing approaches and strategies
i. Cost – based pricing
This approach can be based on cost – plus basis which adds a standard make – up to cost of the product or break – even basis which is to set price to break – even on the cost of making and marketing products or to make the target profit. ii. Product – bundle pricing
This involves combining several products and offering the bundle at a reduced price. iii. Market – skimming pricing
This involves setting a high price for a new product to skim maximum revenue from the segments willing to pay the high price. The product’s quality and image support its higher price and enough buyers want the product at that price; competitors cannot enter the market and undercut the high price. iv. Optional – product pricing
This involves the pricing of optional or accessory products along with a main product.
v. Market – penetration pricing
This means setting a low price for a new product in order to attract a large number of buyers and a large market share. Approaches: the market is price – sensitive so that a low price produces more market growth; the low price must help keep out competition, and the price must maintain its low – price position. vi. Incremental cost
Incremental cost is the cost associated with increasing production by one unit. Because some costs are fixed and other variable, the incremental cost will not be the same as the overall average cost per unit. vii. Captive – product pricing
This involves setting a price for products that must be used along with a main product. Producers of the main product offer them at low prices and set high make – ups on the suppliers.
2. Name the four stages in the PLC
Introduction stage strategies
Markets spend heavily on promotions to inform the target market about the new product’s benefits. Low or negative profits may encourage the company to price the product high to help offset expenses.