Product Pricing Strategies

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Chapter # 14
Barter Compensation Deal Buyback Arrangement Offset Price Discounts & Allowances Loss-Leader Pricing Special-Event Pricing Cash Rebates Low-Interest Financing Longer Payment Terms Warranties & Service Contracts Psychological Discounting Customer-Segment Pricing Product-Form Pricing Image Pricing Channel Pricing Location Pricing Time Pricing Price Discrimination Differentiated Pricing Promotional Pricing Geographical Pricing (Cash, Countertrade, Barter)

Changing Pricing Environment How Companies Price

Understanding Pricing
Consumer Psychology and Pricing

Reference Prices Price-Quality Inferences Price Cues

Survival Maximum Current Profit Maximum Market Share Selecting the Pricing Objective Maximum Market Skimming Product-Quality Leadership Other Objectives Partial Cost Recovery e.g. University Full Cost Recovery e.g. Hospital

Adapting the Price
Price Sensitivity

Surveys Determining Demand Estimating Demand Curves Price Elasticity of Demand Fixed Cost Variable Cost Types of Costs and Levels of Production Total Cost Average Cost Activity Based Cost-Accounting (ABC) Accumulated Production Experience Curve Learning Curve Price Experiments Statistical Analysis

Setting the Price
Estimating Costs

Low Quality Trap Fragile-Market-Share Trap Shallow-Pocket Trap Price-War Trap Initiating Price Cuts

Target Costing Analyzing Competitors' Costs, Prices, and Offers

Delayed Quotation Pricing Escalator Clauses Unbundling Reduction of Discounts Why did the competitor Change the Price? Does the Price Change Temporary or Permanent? Company's Market-Share & Profits if it does not respond? Competitors' responses likely to be to each possible reaction? Selecting a Pricing Method Responding to Competitors' Price Changes Initiating Price Increases

Markup Pricing

Initiating & Responding to Price Changes

Target Return Pricing Perceived-Value Pricing Value...
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